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Precious Metal Quotes from KITCO

Sunday 17 July 2011

The golden time to buy gold!

Never in my years of investing in commodity stocks have I seen gold stocks trade at such low valuations.
Producers are trading at there lowest price per earnings!  Why? People are doubting this gold rally! Gold is not in a bubble, gold will be in a bubble when gold stocks are trading 30-40x earnings; When everybody and there grandmother is filling there portfolios and pockets with gold shares then I will be the first to say that we are in a bubble, and trust me gold will one day be a bubble. Legitimate deposits are trading at 60-100 dollars a oz. something has to give!
We are going to hit 1700 dollar gold this year mark it on your calender, the catalysts behind it will be Qe3, the gold rally in September, Investors rushing into gold as a safe haven from depreciating currencies, inflation, debt downgrades... The list is ENDLESS.
Now that I have gotten rid of the preface of this article lets get into the goods, here are the stocks that I think will outperform the markets, and unlike other bloggers  that like to PUSH stocks I will give you my 2 cents on why  I think they will outperform. The stocks mentioned below will be split into three asset classes; explorers for the dare devils advanced exploration for the gamblers and producers for the risk adverse!

Explorers: 



1) ROG.V   Rox Gold


Shares Outstanding: 49 Million
Cash: 6.5 Million
Market Cap: 20.85 Million
Most Recent Stock Price: .55  


The main project Rox Gold has is the Yaramoko project in Burkina Faso, they optioned this from riverstone resources. The company has had great success in there drill program highlights include 6 meters of 24.62 GPT, 62 meters of .62 GPT, 12m of 5.6GPT and 20m of 2.20GPT.
The company is planning on another aggressive drill program that will consist of 5000m, the company is cashed up, management seems to be top notch. They are also in a very hot gold district. I expect phase 2 drill results to be in line with phase one drill results. The geology seems like the project is of significant size.

This is a high risk high reward stock, if drill results are inline with phase one drill results expect the stock to rocket, a PP was done at .75 cents recently so you are getting in at a lower price than the big boys.



2) RPM. V   Rye Patch Gold


Shares Outstanding: 142 Million
Cash: 9 Million
Market Cap: 48.2 Million
Most Recent Stock Price: .34

Rye patch has a excellent management team, together the management has found 80 million oz of gold, seems like to me that these guys are magnetically attracted to gold! The company has 3.1 Million oz of gold outlined and 40 million oz of silver. They have a LARGE land position and they are located in mining friendly Nevada. Management puts this company in the best words, they are a supermarket for large mining companies, RPM does not have the desire or plans to become a producing miner, they want to sell or spin out properties. There goal is to become a 10 million oz junior and they are well on the way with a limited drill program they have been having great success.
The key project for RPM is the 100% owned Wilco project but they also have another 3 great projects. Insiders own 8 % of this puppy while Kinross owns 15% and a few us funds own 35% of it.


Advanced Exploration: 


1) NES.V   Newstrike Capital


Shares Outstanding: 111 Million
Cash: 20 Million
Market Cap: 260 Million
Most Recent Stock Price: $2.50

Newstrike Capital is a gold exploration company based out of Vancouver with there main project being in mexico.
There main project the Ana Paula project was bought from Goldcorp in 2010, Goldcorp has done a lot of work with the project, lots of early exploratory drilling. The company has a large portfolio of properties. Luckas Lundin is also a significant shareholder in the company.
The drill results this company has put out this year are the creme of the crop, the best drill holes I have seen all year, highlights include 190M of 3.52 GPT and 116m of 4.71 GPT and 112M of 2.51 GPT
The company already has a project that I think is mineable all the projects in this district are well over 3 million oz, significant players in the region are Goldcorp and Torex gold. This Jr is on its way to being a producer in a few years!

2) GCU.V  Gold Canyon Resources



Shares Outstanding: 96 Million
Cash: ( I could not find the exact number but I am saying ~ 14 Million)
Market Cap: 230 Million
Most Recent Stock Price: $2.43

Gold canyon has a very very interesting management team, the company spends all there dollars on drilling. I have never seen a exploration company spend LESS on promotion; This isn't a bad thing trust me, if all junior miners played the way Gold Canyon did the venture exchange would be a great place to invest. I think they are trying to drill out a 10 million oz deposit and then there ultimate goal is to sell it. They have quite a few other projects that they want to dip there hands in once they have ample cash.
The downside to this is that the company isnt fairly valued at these prices at ALL. The company is trading at around 60 dollars a oz! In Canada!! The worlds safest mining district!
The company recently did a PP, they are fully cashed for the foreseeable future. There main project is the spring pole lake project. highlights include 28.5m @ 19.75g/t au within 100.5m @ 7.23g/t au and 4.5m @ 36.21 g/t au within 111m @ 2.03g/t au,  30m @ 5.69g/t au within 50m @ 2.56g/t au.

These are monster drill results for a monster company, right now I am sure GCU wants to get the grades up and bring the tonnage alot higher. I can see GCU north of 12 dollars within a year if gold keeps up the pace and if the boys at Gold Canyon keep getting lucky!


Producers: 


1) GBG.TO Great Basin Gold


Shares Outstanding: 453 Million
Cash: 68 Million
Market Cap: 1.1 Billion
Most Recent Stock Price: $2.05

Great Basin Gold, the producer that trades at the valuations of a driller. GBG has 453 million shares outstanding, yes it is high but there are also two producing mines backing up this baby. 
Great basin Gold is a mid tier producer that is focused on becoming a large producer. The company is slated to produce 330,000 oz a year in 2012 with a average cash cost of about $500.
The Company has 13.6 Million oz in the measured and indicated category, these guys have gold and TONS of it.

Great Basin also has tons of exploration potential, but I am buying this because a senior will snap this company up soon, its just a matter of when. With Burnstone and Holister in production this will be a cash cow. I know this company isn't as exciting as the latest gold play in the Congo but expect this to be a ten bagger in a few years, that is if they can get the poison pill in place.
Shorters be warned....


2) BGM.V   Bakerville Gold Mines


Shares Outstanding: 87 Million
Cash: 12 Million as of November 2010
Market Cap: 135 Million 
Most Recent Stock Price: $1.70

The little gold company that could! The best way to describe Bakerville, the company is slated to produce 40,000 Oz of gold this year, tiny I know but when you compare it to the market cap of this lil company you realize how undervalued this thing really is. This year they will prodce 62 million dollars worth of gold at a average cost of 1550 a oz.
The company has been very careful about selling the gold in strategic times, and they are also not growing "too fast" thereby avoiding dilution. A resource update on Bonanza ledge is pending. The company has a few good projects in the pipelines, I can seem them producing 250,000 Oz a year in 2013. Lots of growth and the exploration potential is massive, they are permitted to drill 300,000m in one project alone. This is great potential and usually unheard of. 

Well that was alot of writing, I am sure it was a chore to read but now you have the greatest gold companies in your hands, be very careful with what you do with this POWERFUL information. Please rate my blog a 5 on stock house and make sure you guys subscribe! I will be posting great articles and my thoughts on the market on a weekly basis.


Thanks for reading!








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