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November 7, 2005

Mid-tier Canadian goldminers, Mon., Nov. 7, 2005, 2:43 PM

Some of you have asked about mid-tier gold producers. To find a good list, you can turn to the Barclays BGI iShares ETF that trades on the Toronto Exchange. Most of the 17 components also trade in the U.S.

Here is the table:

This is a Capped Fund where the MER is capped at 55 basis points, which means the annual cost for admin is 0.55 pct. That compares very favorably to most of the goldminer mutual funds. The trick to earning trading profits is to make timely decisions to buy and sell the index.

Some of you are not able to buy this security through your broker, and you have asked me for the names of the individual gold stocks I recommend. That's not really fair, so what I have done is provide this table with both U.S. and TSX ticker symbols. I also have opined that the senior producers are somewhat expensive now, and that, if this gold rally is to continue, the best bets are in the mid-tier group.

That means dropping the first four from the list (Barrick, Placer, Goldcorp and Glamis) and choosing from the rest. Except there are a few foreign-controlled goldminers operating in Venezuela that I would not touch, for the reasons I have written up (Chavez). Prices have been reacting to the political risks there after there was a major fall-out on Sept. 20.

The gold players in Venezuela are:
Bolivar Gold: TSX: BGC
Crystallex: TSX and AMEX: KRY
Gold Reserve: AMEX: GRZ

I also believe that silver miner Hecla Mining (NYSE: HL) is there as well. Re HL, there is an earnings conference call tomorrow at 11:15am ET .

I hope this helps.

If these names are new (they are after all a group of small caps), then go to the Yahoo Finance industry (Gold) list, and bring up the details on revenues, etc. Then review the charts to see the ones that seem to trade in sync with the rise and fall in the gold bullion.

You'll find some good ones.

Posted by Posted by Bill Cara on November 7, 2005 02:43:17 PM | Category: Goldminer Producers