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How to know if your gold stock is a scam – Brent Cook

Kitco News

If an exploration company is not linking their news releases to detailed drilling data, they probably have something to hide, said Brent Cook, founder of Exploration Insights.

"A legitimate company will put out a couple of paragraphs to tell you this is basically what's going on, anyone without technical ability can understand it, and then they need to include the details, backup data," Cook said.

Huge surges in share prices are also cause for suspicion, Cook noted.

“A lot of companies are looking for something that even if they’re successful, it really doesn’t impact their share price. Basically, the deposit they’re after, it’s too small to be worth a lot in terms of the share price,” he said.

Cook highlighted an example of a miner whose share price declined while their market capitalization went up because the company issued shares, and that’s what investors should avoid.

On the price outlook, Cook is more neutral on precious metals on the back of less volatility in the economy, but a weakening dollar should boost gold in the long-term.

“Looking out two, three years down the road, I’m pretty positive on the gold price but right at the next six months to a year, I guess you could say I’m neutral,” he said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.