Annual Checkup -- NTO

Northern Orion (NTO -- click to register for free RT streaming quote) is a Canadian junior mining company that's getting less junior every day. I bought NTO back in May at $2.14, after having previously bought and sold it at a small profit in 2004. Seeing gold and copper prices -- really, all metal prices -- exploding lately has made me really regret selling AAUK when I did early in 2005, but at least I've got some very significant leverage to gold and copper prices with Northern Orion. None of my argument for buying NTO has changed since I picked up my shares, but the company has picked up another 100 million dollars (US) in market capitalization thanks primarily to the skyrocketing price of Gold. NTO is a risky company, since their holdings consist entirely of shares in three mines -- pieces of a mine in Cuba and the aging Alumbrera mine in Argentina, and 100% of the very promising but still a few years from production Agua Rica mine, fairly nearby Alumbrera. I haven't heard any new news since their last earnings report, but they ought to be reporting their 2005 numbers in the next couple weeks and hopefully we'll hear more then about finalizing the plans for financing and beginning construction at Agua Rica. I have seen my shares nearly double on the strength of very strong gold prices, which will mean that NTO gets better royalties from Alumbrera and will have more potential profit from Agua Rica, but they could easily retreat if gold does. I plan to hold this one as a speculative investment in a cash-rich company that has their hooks in a potentially spectacularly profitable copper (and gold) mine ... and the fact that it's a nice gold-related hedge for my portfolio is nice, too. The boom (bubble, maybe?) in gold makes me a little nervous, as does political risk in Argentina, but not enough to sell -- just enough to prevent me from buying more at these prices.

Keep up with One Guy's Investments, Free Subscription
Enter your email address:

Delivered by FeedBurner