I was a little premature recommending Kingsgate at $1.80 in May. It plummeted to $1.26 briefly at the end of June as panic set in about the gold price. Nearly every global broker has since downgraded their target for gold to about $1100 or below. Just in time as it happens for the seasonal rally in July that usually occurs. Today we have seen gold get back over $1300 and it would not surprise me if gold rallied towards $1500 this month in a sudden spike. The reason is despite levies on gold buying by Indian nationals, both Chinese and Indian demand for gold spikes about this time of year ahead of the wedding season.
As I mentioned back in May, I think the market over-reacted to the report by Kingsgate of early numbers out of their Chalice resource. If I’m right the coming quarterly, due at the end of the month, will confirm that production costs are far lower now the plant is fully operational and into the ore proper. The stock has rallied gradually to $1.70, so still plenty of upside potential if I’m right.
KCN YTD – Kingsgate Set To Recover?
Followers of the Sun Herald Share Race that appears each Sunday in the printed edition will have noticed that in making my comeback to competing in it I have included Linc Energy for the second month. This stock reminds me of Premier Oil in the UK during the expansion phase of North Sea Oil discoveries. Linc is (in Alaska at least) breaking new ground figuratively speaking on a number of fronts. Highly entrepreneurial, pretty speculative, but there is something about Peter Bond and his ambitions for the company that is compelling. Expect a wild ride if you climb aboard. There would not be another stock in the top 200 that has demonstrated its volatility.
LNC 2Y – Volatile – One To Watch
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John Aldersley is the CIO of AldersleyCapital, a “tax-aware” investment manager of separately managed accounts within the Phillip Managed Accounts. He can be contacted by email to john.aldersley@aldersleycapital.com or by visiting www.aldersleycapital.com. |
