Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Goldcorp Inc. (USA) (GG) Stands Tall Through Goldageddon

Page 1 of 2

I don’t know what else to call it; it’s full-on goldageddon out there for the gold mining stocks!

Gold prices just crashed through technical support that had defined recent range-bound trading, and diminished demand from China associated with the ongoing Lunar New Year holiday may have contributed to the fall. Keeping things in perspective, however, I remind investors that the entirety of gold’s ongoing consolidation since the September 2011 high near $1,900 per ounce remains a fairly moderate pullback of 15%. The real goldageddon is not in the physical market, then, but rather in the shares of the companies that mine it.

Goldcorp Inc. (USA) (NYSE:GG)I must concede to some surprise at the depth of Friday’s declines among the miners of gold, since I had viewed the heavily impaired asset valuations already reflected throughout the industry as suggestive of limited downside risk. Some combination of triggered sell stops and outright capitulation may be driving this latest dive; though, admittedly, that is an entirely speculative assessment on my part.

The Market Vectors Gold Miners Index ETF retreated by nearly 3.5% Friday morning, moving uncomfortably close to a multi-year low recorded last May. Following negative comments from Bank of America concerning Gold Fields Limited (ADR) (NYSE:GFI)‘ recent restructuring, that stock plunged by more than 7% Friday to record a fresh 52-week low. Sandstorm Gold Ltd. picked a most unfortunate day to announce a $55 million financing package with Entree Gold Inc., which includes a $40 million metal credit purchase agreement covering future production from Entrée’s interest in an extension of the world-class Oyu Tolgoi mine operated by global behemoth Rio Tinto plc (ADR) (NYSE:RIO) . Sandstorm’s shares were clobbered by nearly 10% Friday morning.

I don’t consider either of the above-cited sell-offs warranted under the circumstances, but just as difficult to square with underlying fundamentals is the market’s failure to reward Goldcorp Inc. (USA) (NYSE:GG) for delivering an exceptional quarter with its year-end earnings (released Thursday after the close). Because Goldcorp is the “master-crafter of deals,” this miner was busy enhancing the value of acquired assets over the course of 2012 rather than booking massive writedowns as rival Barrick Gold Corporation (USA) (NYSE:ABX) was forced to do. Following an enormously successful exploration campaign at Cerro Negro — where first production is expected by the end of this year — Goldcorp has now expanded proven and probable reserves at the project by 177% (to 5.7 million ounces) since acquiring the asset near the end of 2010. In an industry where true value generation has been sorely lacking, Goldcorp continues to break the mold.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!