Wall Street Transcript Interview with Christopher P. Bloomstran, President and Chief Investment Officer of Semper Augustus Investments Group LLC: A Niche for Gold Mining in a Concentrated Equity Portfolio
67 WALL STREET, New York - April 2, 2013 - The Wall Street Transcript has just published its Investing in Gold and Value for Downside Protection Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Value Investing - Long-Term Investing - High Quality Companies - Global Investing - Investment Strategies - Large Cap Investing - Longer-Term Investing - High Quality Companies - Investing in Gold - Long-Term Value Conservation - Precious Metals
Companies include: Berkshire Hathaway Inc. (BRK-A), Newmont Mining Corp. (NEM), Barrick Gold Corporation (ABX), Kinross Gold Corporation (KGC), Mercury General Corp. (MCY), Pepsico, Inc. (PEP), Johnson & Johnson (JNJ), General Electric Co. (GE), Microsoft Corporation (MSFT), The Coca-Cola Company (KO), Citigroup, Inc. (C), Leucadia National Corp. (LUK), Exxon Mobil Corp. (XOM) and many more.
In the following excerpt from the Investing in Gold and Value for Downside Protection Report, an expert portfolio manager discusses his investment philosophy and his portfolio-construction strategy:
TWST: Over the last year or so, platinum mines have suffered productivity drops because of strikes and other difficulties. Are gold mining companies impacted by strikes and labor disruptions as well?
Mr. Bloomstran: It has not been as much of an issue with the gold miners, though that may change as companies expand production in tough places. You now have very little new net mine supply, which has been shrinking. The industry is spending on the order of $4 billion a year on exploration, and they are just not finding new ore bodies.
So when you get to places that are less hospitable than Canada, North America and friendly parts of South America in an effort to develop mines, you have had some labor unrest. I don't think you had anything on par with you've seen with some of the platinum guys, but it's tough. New finds have been in bad places.
Of the two gold miners in our portfolio today, Kinross and Newmont, Kinross really is probably the more interesting in terms of upside but also in terms of political risk as well. They operate in places like Mauritania. Both have operations in Ghana. Mauritania can be described as as sketchy place to operate, governed for I think a mere one year under elected officials since free from France in 1960. The current junta eliminated that official a few years ago. Kinross lost several of their top mining engineers in a helicopter, ahem, crash last year trying to fly gold out of the country.
So it's tough; labor is very difficult. The reserve grades and mining costs are fantastic, so you take the risk, but you also look for diversification among projects within a company. Companies with reserves in better places command a premium. Investors in mining companies need to be keenly aware of things like the recent nationalization of oil interests in Venezuela and elsewhere...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
