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The Gold Stock Strategist analyzes leading junior gold producers and major gold mining companies.

Comments are welcomed!

Saturday, June 20, 2009

List of Emerging Junior Gold Producers with Symbols

The Gold Stock Strategist covers 36 emerging junior gold producers and posts do not always include the Canadian and U.S. ticker symbols. Readers have asked me to provide this information when I rank companies based on different metrics. It isn't possible due to formatting problems in html. Hopefully, this post will help readers with their due diligence.

The following is a list of covered junior producers with trading symbols.


COMPANY

CANADIAN SYMBOL

U.S. SYMBOL

Alamos Gold

AGI

AGIGF

Alexis Minerals

AMC

AXSMF

Allied Nevada

ANV

ANV

ATW Ventures

ATW

ATWGF

Aurizon

ARZ

AZK

Capital Gold

CGC

CGLD

Castle Gold

CSG

CSGLF

Claude Resources

CRJ

CGR

Dynasty Metals

DMM

DMMIF

Gammon Gold

GAM

GRS

Gold Resource

--

GORO

Gold-Ore

GOZ

GREXF

Golden Star Res

GSC

GSS

Great Basin Gold

GBG

GBG

Hawthorne Gold

HGC

HWTHF

Jaguar Mining

JAG

JAG

Jinshan Gold Mines

JIN

JINFF

Kinbauri Gold

KNB

KINBF

La Mancha

LMA

LACHF

Lake Shore Gold

LSG

LSGGF

MDN Inc.

MDN

MDNNF

Metanor Res

MTO

MEAOF

Minefinders

MFL

MFN

New Gold

NGD

NGD

New Guinea Gold

NGG

NGUGF

Northgate

NGX

NXG

NovaGold

NG

NG

Oceana Gold

OGC

OGDCF

Osisko Mines

OSK

OSKFF

Richmont Mines

RIC

RIC

San Gold Corp

SGR

SGRCF

Santa Fe Gold

--

SFEG

Timmins Gold

TMM

TMGOF

Troy Resources

TRY

TRYRF

Vista Gold

VGZ

VGZ

Wesdome

WDO

WDOFF



Best,

The Gold Stock Strategist

----------------------------------------
Full disclosure: I own shares in many of the companies listed above. The information provided in this post is believed to be correct, but not guaranteed. Investing in junior gold miners entails risks. Readers are responsible for their own investment decisions. Do your own due diligence.

Friday, June 19, 2009

De-Hedging Trends Remain Bullish for the Price of Gold

The latest quarterly hedge book analysis from compiled by GFMS Ltd. for Société Générale was released on June 13 and shows net dehedging in the first quarter of 2009 was 3 tons.


(click chart to enlarge)

This data is important because it provides insight into the direction of the price of gold. If gold producers are de-hedging they are reducing the supply of gold on the market which should theoretically increase the price of gold. If companies are hedging, it puts downward pressure on the price of gold. Hedging isn't the only institutional force that puts downward pressure on gold prices. Other major actions that put downward pressure include central bank & IMF sales and central bank gold leasing. Analysts believe company de-hedging over the past several years has been one of several reasons that the price of gold has moved near $1,000 an ounce over the past year or so.

So what does GFMS/Société Générale say about the gold producer's hedge book?

The one large hedge buy-back in this quarter came from AngloGold Ashanti as they restructure their hedge portfolio to take advantage of higher gold price forecasts. The majority of the remaining hedge book is held by Anglogold Ashanti and Barrick Gold.

The global value of the producer hedge book was steady at negative $5.8 billion in Q1 2009.

Also of interest was the statistic that producer prices increased by 15 percent, rising from $783 an ounce in Q4 2008 to $897 an ounce in Q1 2009 (see chart below).

(click chart to enlarge)


There are currently 1.4 million ounces (44 tons) of contracts with maturity dates in 2009. The chart below shows the scheduled delivery of contracts currently and formally planned by global producers. Because AngloGold Ashanti and Barrick Gold control the majority of the hedge book, decisions they make can swing these plans sharply.




(click chart to enlarge)


GFMS and Société Générale expect mining companies to continue to remove hedges at a higher rate than suggested by the delivery profile (see chart above) and do not see a return to wholesale hedging by major producers.

Fresh hedges in the first quarter of this year were related to project finance in a period of unprecedented illiquidity.

Moreover, investors want to invest in gold mining companies that are unhedged in this era of rising gold prices.

As a result, GFMS/Société Générale expect gold producers to further remove hedges at a faster rate than the delivery profile suggests.

This would be bullish for the price of gold.

Best,

The Gold Stock Strategist




Wednesday, June 17, 2009

Emerging Gold Producers Ranked -- Market Cap $ Per Oz. of Production

Thanks to Haligonian for pointing out the errata on Oceana Gold's market cap. It has been fixed in the table.
========================
One of the quantitative techniques I use to evaluate emerging junior gold producers is the market capitalization in U.S. dollars per the projected ounces of production in 2009.

Like other techniques, this one provides a standard quantitative comparison of company share valuation. Again, it is just one dimension used to assess whether or not an emerging junior gold producer warrants more scrutiny.

As I have written before, once I have several standard quantitative measures for assessing stocks I can apply qualitative factors to the investment decision like political risk, currency exchange risk, property rights risk, remote site risk, single mine risk, operational risk, and management competence risk.

The following is my analysis of 36 emerging gold producers using the market cap to production metric based on closing share prices on June 15, 2009. The lower the value, the more undervalued the stock.


COMPANY


MARKET CAP

(millions $)

MC / OZ. PROD. ($)

Proj. 2009

1

Oceana Gold

OGDCF

$166

$553

2

MDN Inc.

MDNNF

$56

$751

3

Castle Gold

CSGLF

$40

$989

4

Gold-Ore

GREXF

$49

$1,089

5

Golden Star Res

GSS

$451

$1,127

6

Richmont Mines

RIC

$90

$1,201

7

Troy Resources

TRYRF

$72

$1,301

8

Metanor Res

MEAOF

$31

$1,310

9

La Mancha

LACHF

$113

$1,333

10

Northgate

NXG

$537

$1,414

11

Alexis Minerals

AXSMF

$65

$1,437

12

ATW Ventures

ATWGF

$43

$1,720

13

New Guinea Gold

NGUGF

$26

$1,733

14

Jinshan Gold

JINFF

$139

$1,990

15

Claude Res

CGR

$90

$2,006

16

Wesdome

WDOFF

$159

$2,126

17

Dynasty Metals

DMMIF

$114

$2,270

18

Santa Fe Gold

SFEG

$91

$2,286

19

Capital Gold

CGLD

$120

$2,398

20

Timmins Gold

TMGOF

$37

$2,488

21

Gammon Gold

GRS

$923

$3,182

22

Jaguar Mining

JAG

$556

$3,368

23

Aurizon

AZK

$634

$4,224

24

New Gold

NGD

$893

$4,463

25

Gold Resource

GORO

$199

$5,694

26

Alamos Gold

AGIGF

$880

$5,864

27

Allied Nevada

ANV

$476

$6,805

28

Minefinders

MFN

$456

$7,596

29

Great Basin Gold

GBG

$536

$8,941

30

San Gold Corp

SGRCF

$474

$9,489

31

Lake Shore Gold

LSGGF

$452

$18,075

32

Hawthorne Gold

HWTHF

$23

--

33

Kinbauri Gold

KINBF

$30

--

34

NovaGold

NG

$871

--

35

Osisko Mines

OSKFF

$1,480

--

36

Vista Gold

VGZ

$71

--



I hope this helps readers get a sense for the relative value of these companies based on this valuation metric.

Best,

The Gold Stock Strategist

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