Taking profit: Sell in May and go away may be good advice this year!

As I have said before, it is never wrong to take profit. While no one can time the market (and I certainly am not attempting to do that here) however, taking profit when you are doing well is simply good common sense, especially at a time when macro events may tip the scales against your investment strategy,

As you already know, I like commodities! I like hard assets and hold gold, silver, lithium, copper etc.  I believe that, in the long run, these are great investments. I am concerned at this time, about the strong head winds which seem to be rising at this time in equity markets, and so, today, I took some good profits off the table and sold off shares.

I have done this for the past two weeks in fact, taking profit in the following companies:

San Gold Completes Crusher Installation, Increases Mill Throughput

Image via Wikipedia
2011-04-27 08:00 ET - News Release

Canada NewsWire

BISSETT, MB, April 27

TSX: SGR  |  OTCQX: SGRCF
www.sangold.ca

BISSETT, MB, April 27 /CNW/ - George Pirie, President and CEO of San Gold Corporation (TSX: SGR) (OTCQX: SGRCF) is pleased to report that crushing plant upgrades have been completed and that test milling has shown a large increase in production capacity for Rice Lake Project mill operations. The first full week of operations using the improved crushing circuit (April 15 to April 21) realized an average of 1,513 tons per day processed, including an all-time daily record of 1,679 tons.  Recovery rates were maintained at 94% during this period.

"These capital improvements were completed ahead of schedule and have increased our mill's capacity beyond design specifications," said Mr. Pirie.

The 15 Best and the 15 Worst Mining Jurisdictions in the World

Image via Wikipedia

April 15th, 2011

 

With the announcement yesterday that Bolivia President Evo Morales will announce a decree on May 1st to “dismantle the privatization model” of the mining industry and expropriate all assets owned by private mining companies, is this just an isolated example or will this be the start of a trend that many other governments will follow? Since gold and silver mining companies will exhibit the fastest earnings growth rate among any industry for the next several years, one should expect to consider political risk as a much greater part of the equation when investing in mining stocks in coming years.

So where are the riskiest mining jurisdictions in the world and where are the safest? According to the most recent Fraser Institute survey, here are the mining jurisdictions that graded the best and the worst for “encouraging mining investment” and granting “legal processes that are fair, transparent, non-corrupt, timely, and efficiently administered”. In order to rank these mining jurisdictions from top to bottom, the Fraser Institute asked mining executives and exploration managers in 79 mining jurisdictions around the world to grade the effect of government policies on mining operations (including restrictive regulations, uncertainties about land use, and the ever looming issue of restrictive taxes), the nature of trade, environmental, and operational barriers, and the effect of mineral potential on additional exploration investment. Furthermore, to encourage objective responses to the survey questions, the Fraser Institute surveyed all mining executives anonymously.

By comparing the grades of the jurisdictions below, you should be able to assess the risk and future probability of an Evo Morales type event happening to a mining company whose shares you own.

San Gold predicts 84% increase in output in 2011

San Gold Corp
www.SanGold.ca
TSX: SGR || OTCQX: SGRCF 

Right: SanGold Rice Lake Mine.

Over the past year, the Share price of mid tier gold producer, SanGold, has gone from $5 to $2.52

That selloff was, in my humble opinion, way over done, and San Gold is primed to out perform in 2011 and beyond. In the past week alone, the company announced its production of gold is up significantly in Q1 and it has a new, rich discovery at the 007 property. Production has increased at their Rice Lake mine beyond the capacity of their mill, with an abundance of ore waiting to be processed.

This is not a small prospector, but a mid tier, producing gold miner, with two producing mines and processing capacity which has to be increased this year just to keep up with its own production of gold. To this point, management has been tilted toward an overwhelming technical and production expertise, while not taking advantage of marketing to best advantage.  I believe this will change as new management takes the reins which has already begun.

Sangold highlights:

• Two mines in production - Rice Lake and The Hinge. The Hinge went into production within two years of discovery.
• The 007 zone has started bulk sampling.
• Mill production approaching capacity as new ore development comes online.

Consistent growth and market appreciation since 2005.

• Revenues tripled from 2008 to 2009 -- from $8.7M to $27.8M.
• On track to double revenues again this year.(2011)