6 Gold Stock Picks from Louis James of Casey Research

This article was first published on Gold Investing News on January 18, 2015.
Cambridge House International’s Vancouver Resource Investment Conference is currently taking place at the Vancouver Convention Center, and thus far there has been no shortage of great presentations. 
One of Sunday’s highlights was a talk by Louis James, chief metals and mining investment strategist at Casey Research. Investors who arrived at the show in time for its 8:30 a.m. start got to hear about why James still believes in gold stocks and what some of his current favorites are.
In terms of the former, James said that gold is up about 10.5 percent since November 2014, noting that “there are stocks out there that have doubled in that time.” He explained, “that is the leverage stocks offer to the underlying commodities, and that is the reason why most of us are speculators in this business.”

Continuing, he emphasized that there are stocks investors “can buy that offer legitimate value, objective value today.” But what are those stocks? Without further ado, here are a few that he mentioned:

• Integra Gold (TSXV:ICG) — According to James the company has a reasonably sized high-grade gold discovery in Quebec, and recently bought a neighboring mine out of bankruptcy for $1.8 million. “With that they got a fully permitted plant that processes precisely their type of ore, they got a tailings facility,” he said, adding, “they also got a couple million ounces of questionable-grade gold that drove the other company bankrupt, but could be of value when gold comes back up again.” 

• Continental Gold (TSX:CNL) — James admitted that Continental Gold’s Buritica project is in Colombia, a jurisdiction that’s “not for everybody.” However, he thinks the area is fairly safe, and noted that positive aspects of the project include the fact that it’s “big, multi-million ounce, and it’s high grade.” Furthermore, it “boasts a very high internal rate of return.”

• Dalradian Resources (TSX:DNA) — Dalradian has a big, high-grade gold discovery in Northern Ireland, and James said the company has already “seen a great deal of support for this project.” He believes part of the advantage for investors lies in the fact that many don’t understand Northern Ireland.

• Kaminak Gold (TSXV:KAM) — Though it’s “a little earlier stage,” James is a fan of Kaminak due to its Yukon-based project’s high margins. And, he added, “they keep discovering more gold.” 
  

• Rubicon Minerals (TSX:RMX,NYSEMKT:RBY) — James sees Rubicon as “maybe the next big takeover in Canada.” The company has a high-grade project, and though it’s not the biggest in the world, it’s “substantial,” with drilling making it bigger. A plant is almost built, and it’s not far from Goldcorp’s (TSX:G,NYSE:GG) flagship operation in Red Lake, Ontario. “This thing’s got takeover written all over it,” he concluded.

• Dynacor Gold Mines (TSX:DNG) — James’ final pick is a little different from the companies listed above. Dynacor processes third-party ore in Peru, a business model it’s done particularly well with lately as “the Peruvian government has been cracking down on illegal miners and illegal processing.” What’s even better, however, is the fact that Dynacor “makes money whether gold goes up or down.” In sum, James believes the company “will surprise the market to the upside.”

To close, James also mentioned a few other stocks that he’s keeping an eye on, but believes are a little costly since gold’s recent uptick. They are: Klondex Mines (TSX:KDX), Rio Alto Mining (TSX:RIO,NYSE:RIOM) and Pretium Resources (TSX:PVG,NYSE:PVG).
Stay tuned for a video interview with Louis James.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.