Golden Trio

10/15/2014 8:00 am EST

Focus: COMMODITIES

Brien Lundin

President, Jefferson Financial, Inc.

Gold traded perilously close to the $1,180 level that’s marked two previous bottoms in the price—in June and December of last year—asserts metals expert Brien Lundin, editor of Gold Newsletter.

But—and this is vitally important—gold did not breach that support level. If gold fell through that long-held support line around $1,180, there’s no telling how much further it would have fallen but a decline through $1,000 would not have been out of the question.

So, this remains the key line in the sand and something we must continue to watch. Meanwhile, here's a look at some of our recommended stocks.

Almaden Minerals (NY: AAU) (TSX: AMM) has a portfolio of projects in Mexico and Canada. The gold-silver project is located within the company’s Tuligtic project in Mexico and has a gold-equivalent resource of 3.53 million ounces.

With a wealth of supporting infrastructure available and Mexico’s mining friendly culture, Ixtaca is sure to move along the path to development. The deposit’s average grade, its continuity, and its open-pittable nature all bode well for a future mine here.

Once the precious metals markets find their legs, Almaden should be amongst the earliest movers. It is a definite long-term value buy near current levels.

If you’re looking for a single investment that gives you wide exposure to commodities of all types, Altius Minerals (TSX: ALS) (OP: ATUSF) is a great way to go.

This royalty company has interests in 12 producing mines in Canada, in resources ranging from thermal and metallurgical coal to potash, nickel, copper, and cobalt.

If you believe, as I do, that the global competition for scarce commodities is only going to drive prices up in the future, an investment in Altius’ diverse royalty and project portfolio makes a great deal of sense.

Avino Silver & Gold Mines (TSX: ASM) (NY: ASM) is a silver-predominant precious metals producer with operations in Mexico and a recent acquisition that will give it gold production in British Columbia.

Production growth prospects look bright as the company recently completed a dewatering effort on the past-producing Avino Mine in Durango State, Mexico.

The company believes it can return to the production levels that the mine enjoyed prior to 2001, when it was shuttered due to low metals prices. In its last year of production in 2001, the Avino Mine generated 853,183 ounces of silver, 5,080 ounces of gold, and 3.7 million pounds of copper.

Those production levels would bolster the property’s overall production profile considerably. Add in the gold production potential of the operating Bralorne gold mine in British Columbia and you have a highly intriguing production growth story.

This latter acquisition is currently pending the acquisition of the 66% of Bralorne Gold Mines shares that Avino doesn’t already own. In short, Avino Silver & Gold Mines looks primed to deliver value for shareholders long-term. It’s a buy.

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