Top Analyst: Buy These Gold Miners in Q3

gold600X300The Gold Report: Paradigm Capital’s top picks for Q3/16 include gold and zinc mining companies with upcoming catalysts worthy of investors’ attention.

Paradigm’s top picks include Alamos Gold Inc. (NYSE:AGI), Integra Gold Corp. (CVE:ICG), Klondex Mines Ltd. (TSE:KDX) and SEMAFO Inc. (TSE:SMF).

Alamos Gold’s mines became “free cash flow neutral” in the first quarter, and the company should “handily beat 2016 guidance,” the report notes, adding that “exploration sizzle from the La Yaqui and Cerro Pelon deposits is also possible.”

SEMAFO, according to Paradigm, “has a great base and lower-risk growth pipeline.” The Q3 catalyst “is an inaugural resource at the Yama deposit will add to the overall resources at Mana,” the company’s project in Burkina Faso.

Klondex Mines has several catalysts in the second half of 2016, including new resources for True North, “an official production decision before year-end” and the revision of analyst forecasts “to reflect this new operation.” The company’s shares are “poised to regain a portion of their ~18% underperformance versus peers over past three months,” the report states.

Paradigm notes that Integra Gold’s project is “unique” given that it is undeveloped, capable of producing 100 Koz annually for more than 10 years, and has a fully permitted mill. The Quebec, Canada-based company is focused on development of Lamaque South. “In H2/16, an updated PEA and resource are expected,” the report notes.

Gold Mining ETFs Also a Good Choice

To benefit from a wider run in gold miners, and avoid exposure to single stocks, investors should also look at Market Vectors Gold Miners ETF (NYSE:GDX). This popular fund tracks the overall performance of companies involved in the gold mining industry, including larger and smaller miners. GDX, which is up 120% year-to-date, fell $0.10 (-0.33%) in premarket trading Friday to $30.11 per share.


Another ETF option is the Market Vectors Junior Gold Miners ETF (NYSE:GDXJ). GDXJ is similar to the GDX, except it only includes so-called “junior” mining companies — those with smaller market caps. GDXJ, which has gained 158% since the start of the year, fell $0.20 (-0.40%) in premarket trading to $49.50 per share.


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