Despite claiming to have some knowledge of gold mining (15 years of resource and reserve management in the industry) it really doesn't seem to help me to pick winners when it comes to investing in Australian gold companies. I can read the quarterly reports and other stock exchange announcements and can thoroughly understand what they're saying and whether they're in with a chance of making money or not but it's nearly impossible to see through the financial haze of forward sales agreements and identify whether their financial backers are just about to pull the rug out from underneath them.
I've had a few good winners over the years but my list of recent losers is long and illustrious starting with Sons of Gwalia, one of the West's former golden stars which went belly up in grand style despite having substantial resources (which the administrator flogged off at a ludicrously low price to someone who's done very nicely out of it, thank you very much) and a reasonably healthy production track record. I'm currently considered a creditor thanks to a recent landmark High Court ruling but by the time the dust settles, I'll probably end up with three fifths of five eighths of not very much and a handful of shares in the new company. Arrivederci $4,500.
My Croesus investment (another once well-managed West Australian operation) looks very shaky, the company has been in a trading halt for some time, is sailing very close to the wind financially and I'm certainly not holding my breath.
But today there was some good news. At Beaconsfield (where a couple of miners were trapped for a fortnight after the Anzac Day cave-in last year and the company went into a trading halt) the company has finally emerged from the trading halt and looks set to resume production after a much needed corporate tidy up which has seen a rare piece of corporate pragmatism come to the fore. After 12 months in limbo my investment can be traded once more. All I need is a good spike in the gold price and I may even make a small profit.
And if you want a good laugh take a look at this little gem. Not a mining company, but a corporation which tries to make money out of trading all manner of gold options and contracts (shorthand for I've no idea what they actually do). Suffice it to say that my investment is currently worth less than half what it was when I started.
All I can say is it's a good job I mostly invest in other sectors of the stock market. Thank goodness for the banks and listed property trusts.