Investment Scramble for Selected Gold Mining Stocks as Fiat Currencies Race to the Bottom: a Wall Street Transcript Interview with Gabelli Gold Fund Analyst Christopher Mancini

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67 WALL STREET, New York - January 8, 2013 - The Wall Street Transcript has just published its All-Cap Growth Investing and Other Strategies 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 public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: All-Cap Growth Investing - Closed-end Mutual Funds - Investing in Gold - Bottom-up Investing

Companies include: Randgold Resources Limited (GOLD), Industrias Penoles S.A.B. DE CV (IPOAF), and many others.

In the following excerpt from the All-Cap Growth Investing and Other Strategies Report, an expert gold and precious metals portfolio manager discusses one of his top mining stock picks:

TWST: Tell us about another company in your portfolio.

Mr. Mancini: Another large position which has done very well for our shareholders is Fresnillo PLC (FRES.L), which is listed in London; it's a Mexican-based company, it's controlled by Penoles (IPOAF), which is in turn controlled by a wealthy Mexican family. The thing we like about Fresnillo is that it has great assets and that it has a very owner/operator-type mentality when it comes to the company's management and strategy. Fresnillo's assets generate a lot of cash flow, and then every year the company determines whether it wants to deploy this cash flow on exploration and development projects, or whether it wants to pay it out in the form of a dividend.

For example, in 2011 Fresnillo paid out $1.05 in dividends, and that was because the company's board determined that in 2012 the company wouldn't have a very big capital budget. Now in 2012, Fresnillo is not declaring a special dividend because during the past few years, the company has found and delineated various projects that it feels should be developed. Fresnillo wants to maintain the cash it has on its balance sheet currently because it knows that it has a relatively big capex budget for 2013. At the end of 2013, the company will determine whether or not it should pay a dividend or whether it would make more sense to deploy the cash into projects which would have high returns on capital and generate incremental cash flow.

One example of a project which was brought on line recently by Fresnillo is the Saucito project, which is adjacent to their namesake Fresnillo mine in Zacatecas, Mexico. Fresnillo spent around $350 million to build Saucito. In its first two years of production the operation should generate over $350 million of cash flow and operate for many years into the future. This dynamic translates into a high return on capital.

Fresnillo doesn't just grow for growth's sake, and to the degree that it feels that it doesn't have projects that would generate high returns on capital, the company returns cash to shareholders on an annual basis in the form of a special dividend...

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.

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