Glennon Capital

Gold was one of the big winners leading into 2011. Since then an improving environment and the perception of increasing interest rates had led to gold falling 35% off its 2011 highs. While we had steered largely clear of resources to the end of last year, early this year we invested in a couple of small cap gold producers. We tend to look at gold stocks individually, just as we would other businesses. We consider where the projects are located, how many ounces they produce (or will produce) and for how long, what the all in sustaining cost is and how much needs to be spent on exploration and on corporate costs, among other factors. Beyond that we look at more strategic elements: is a developer fully funded through to production and when will we see first cash flow from the project, or is new management likely to do a better job at running the business than previous management? (VIEW LINK)


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