Goldcorp Went Ahead And 'Made My Day'

I was emailing back and forth with my pal Brien Lundin, editor of Gold Newsletter, this week and as we were basking in the limelight of analytical brilliance, it occurred to me that having a stock that many of us own, Kaminak Gold Corp. (KAM:TSX.V), suddenly the target of a $520,000,000 bid by a major mining company, Goldcorp Inc. (G:TSX; GG:NYSE), is exactly how proper analysis should be rewarded. At least, that's how we were taught, to say the least. To wit, this event is truly a significant watershed and a concrete block of confirmation that the New Golden Bull has arrived. Whether or not you are a raving foam-in-the-mouth bull, or a patient hiding-under-the-desk bull (as am I), Goldcorp's bravado is a wonderful thing to behold and would have made Harry Callahan proud.

What really got me thinking that inevitably Kaminak would be acquired was when the company released the preliminary economic assessment in 2015 where it basically told us that in an area covering perhaps 20% of the land package, it had identified 1.8 million ounces (1.8 Moz) gold Measured and Indicated and 3.4 Moz Inferred. So with a 5 Moz deposit in arguably the most mining-friendly territory in the world, it really wasn't much of a surprise when mighty Goldcorp stepped in with a half a billion dollar bid, but it WAS an absolute delight. Good on Goldcorp and good on all of you that own/owned Kaminak, but rather than standing here holding the bouquet of roses, batting my eyes and curtseying, let's move on. . .

The COT Report

For the week ended May 10, this Ali-Frazier slugfest continues with the Commercials covering a few shorts modestly. I think that whenever the bullion bank bubbleheads cover shorts into essentially a flat or rising market, the following move is not likely to be down. However, these last few weeks have been as chopped up as I can recall and traders usually get that kind of treatment with whipsaw losses everywhere. I have determined that gold and silver miner ETFs (GDX [Market Vectors Gold Miners ETF]/GDXJ [Market Vectors Junior Gold Miners ETF]/SIL [Global X Silver Miners]) are far too overbought to initiate new positions, but selective junior explorers that have yet to move look OK and the gold-to-silver ratio still favors silver over gold and is a glaring short. One thing I am not doing right now is TRADE; I am holding on for dear life with modest hedges in place with self-medication a necessity.

I've had a lot of emails this week asking me where I will deploy the proceeds from the Kaminak sale and surprisingly, I will leave the original $0.77/share entry price in Goldcorp stock and then take the profit of $1.83/share and buy the "Magnum" portfolio with the proceeds. I launched the Magnum two weeks ago and as you can see from below, it got a nice boost this week.