Chris:

have you been posting re RIC?

Given gold’s climb, this sector is an apt place to begin. Our pick in this arena, for the second time was Richmont Mines (RIC-TSX). On our first go with this stock, circa 2000, it was purchased at $1.81. Two years later it was spun out at $4.60. It was featured in this space last November soon after we picked it up. Who says history doesn’t repeat itself?

The stock moved up quickly, passed our previous sale price and was closing in on the $5.00 mark but we decided there was more upside, this time with $6.24 as the target. Unfortunately the price regressed after the quick run, currently just under $4.00. We’re pretty confident that there is another run from this level. Evidently so is Greg Chamandy, who has recently bought a substantial piece of the company, and was just elected as the chairman. He specializes in developing small companies into much larger ones. Gildan Activeware (GIL-TSX) is the best known.

The most recent quarter, where the average price of an ounce of gold was $899 featured revenue of $19.1 million, up from $16.5 million in the same period last year. However, the company was just slightly north of break-even. Currently though, this unhedged miner, with no long-term debt is receiving much higher prices for output than last quarter. That is being offset somewhat by higher production costs at the Island Gold and Beaufor Mines, which increased year over year from $615 to $780 per ounce because of lower recovered grades. That cuts big time into the bottom line. However, with the price of gold resting above $1,000, the bottom line should be buoyed. Though better than a double since our purchase, the future looks shiny.