Top Gold Picks from US Global's Ralph Aldis

07/25/2018 5:00 am EST

Focus: COMMODITIES

Frank Holmes

CEO and CIO, U.S. Global Investors, Inc.

In his Frank Talk column for US Global Investors, CEO Frank Holmes offers a short Q&A with Ralph Aldis — co-portfolio manager for the World Precious Minerals Fund (UNWPX) and the Gold and Precious Metals Fund (USERX).

Where do you expect to see gold production in the next few years?

It’s possible that the U.S. could see a rise in gold output this year. China production fell last year, Australia production has been going up slightly and Russia production is somewhat flat.

I think with some of the new revisions to the Environmental Protection Agency (EPA) rules, mining projects could move forward on a more known timetable.

One of the things the Trump administration has been trying to do is simplify the process of obtaining a mining permit. If companies can get the permits more easily then I think we’ll see some production growth in the U.S.

What are your top three gold stock picks right now?

One of my favorite gold stocks right now is St. Barbara Ltd (SBM). The company is based in Australia and has two mining operations. It’s been hitting it out of the ballpark in terms of performance driven by strong management.

The CEO came in to our office about two years ago, Bob Vassie, and the stock price was 18 cents then and today it’s 5 dollars. I think St. Barbara is consistent in terms of management and has solid execution — everything that you’d want in a gold miner. 

Another stock I like that’s in the mid-cap space is Wesdome Gold Mines (Toronto: WDO) based in Canada. One of its mines that is on care and maintenance recently had phenomenal drill hits down to deeper levels.

What we’ve been finding with mines in the last few years is seeking funding in order to drill deeper to find deposits. I think it will probably be one of the next take outs in Canada, in terms of someone seeking a safe jurisdiction to operate in.

A third stock I like right now that is a micro-cap is Barksdale Capital Corp. (Vancouver: BRO), a base metals exploration company located in Arizona. Its property sits right next to Arizona Mining’s property, which was recently bought out for $1.4 billion.

Right now Barksdale has a market capitalization of $30 million. This valuation difference is massive and I think someone will probably want to buy them too and develop the project, since it’s too cheap to just leave it.

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