Gold stocks - Aug 2007

Gold stocks are one of the most compelling sectors of the equities market for several reasons.

1. Inflation is emerging

2. Gold is technically close to a breakout. You might be thinking that gold has already risen a great deal, but it has not kept up with the other commodities. See my posting on my Commodities blog.

The next question then is how do we position ourselves for this phenomena. We already have the major stocks trading at huge multiples, so its worth looking at some of the smaller stocks.

Listed on the Australian Stock Exchange (ASX) we have:

1. Bendigo Mining: This company has recently fallen off considerably after it revised its gold resource estimation model that culminated in a significant downgrading of its resource inventory. Since the downgrade the company has found new ore resources in new vein systems.
2. Resolute Gold: Resolute has an operating gold mine in Ghana, Africa and is developing several others.

Stay tuned for more info.

- Andrew Sheldon www.sheldonthinks.com