New York, NY (PressExposure) February 16, 2012 -- Sasha Cekerevac, co-editor for financial web site and newsletter Penny Stock Detectives believes that Canadian gold mining companies present compelling value not only because there are some great mining firms in Canada, but there is also the added benefit of hedging the U.S. dollar risk by owning the Canadian dollar. According to Cekerevac, the U.S. dollar has been eroding steadily for many years against many of the major currencies around the world.
"This should matter to all investors, because it makes you relatively poorer overall, even if your stock picks have gone up," warns Cekerevac. He cites an example where, if an investor owns a U.S.-based mining firm and earns 20% over two years, but over that same period, the U.S. dollar falls by 20% against the major currencies of the world, then the investor is essentially not any wealthier-there is no gain because of the loss of purchasing power.
Cekerevac is convinced that central bankers around the world will continue to print money, which will depreciate the U.S. dollar and move gold higher. On the Canadian dollar, Cekerevac is bullish, because "it's backed mainly by commodities like gold. The higher commodities like gold go up, the higher the Canadian dollar should trade as well. And if you invest in junior mining companies that will profit from strong gold prices and a higher Canadian dollar, you are able to profit from two potential sources."
Cekerevac believes the focus in the junior mining space should be on a solid management team with outstanding prospects for developing their properties. One company Cekerevac thinks fits the profile is Timmins Gold Corp: "Timmins just came out with its most recent third-quarter numbers and the results were very strong. In the third quarter, the precious metals miner produced 21,524 of gold ounces. This included a record December for the firm of 8,504 ounces of gold. This is an excellent example of a Canadian gold miner producing solid results and growing output."
Cekerevac points to junior mining companies, especially in the gold sector, occasionally having bumps in the road, but also says this provides investors with an opportunity to buy quality firms on the cheap. One such company, in Cekerevac's opinion, is Primero Mining Corp. It sold off on news of lower ore grades, but "the company expects to produce between 100,000 and 110,000 ounces of gold equivalent in 2012, with a cash cost of $630.00-$660.00 per gold equivalent ounce. Even with the pullback, this is a company producing actual gold; not just exploring."
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