Gold is approaching its previous high, and with strong oil and a buoyant Dow, we can expect gold to break its historic levels. We also have some other positives for gold in the background. There remains tensions in North Korea, and the spectre of troubles with Iran, and a oil supply bottlenecks. Expect higher oil and gold prices. There is a crisis in the making here.
After a recent issue, Vital Metals (VML.ASX) has recovered from 8c to 11.5c. The 12c level is resistance, so I would expect the stock to hover in the 10-12c range for a week or two before moving higher on the basis of successful drilling for gold in Burkina Faso, West Africa. This company is not cheap considering its lack of resources. However, successful drilling will justify a premium. For this reason, I sold some stock today at 11.5c, and seeing that someone was buying MIL Resources (MGK.ASX), I switched into this stock. I am less concerned about the weight of new stock given the outlook for gold and the small size of the placement/issue.
MIL Resources has not announced any drilling program, though I suspect they have ramped up trenching, and will have some nice results to report in this quarter, as well as the prospect of some drilling results in the March quarter. In this quarter I expect them to be building roads for access, and drill pads for drilling rigs. They have a Chinese JV partner, which they will need to cover costs. This stock has a great target, so I am only too pleased to buy more of this stock at 3.3c.
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