Gold has now convincingly broken up above $900/oz, signalling a move higher move. It would therefore seem appropriate to look more closely at gold stocks. A reader directed me to Gryphon Minerals, which is a stock which I remember as having good gold projects in Africa. Upon further investigation I can confirm that this is a good stock; so let's review it:
1. They have over $5mil in cash - so they won't see to return to the market for more money soon
2. Their market capitalisation is just $9mil (with 114mil shares at 8c), placing a value of $4mil on their gold projects, when they have $500mil of in-situ gold.
3. They are surrounded by large gold deposits
4. They have excellent exploration upside - with a large mineralised shear zone to test, which extends to a major gold mine further south.
5. The chart is indicative of a technical buy
The problems for them are that:
1. They are not very advanced - they only have 400,000 oz of gold resources. That will not excite the market, but some success drilling the strike extents of this deposit I am confident will excite the market, and in a gold boom, we can expect this stock to retrace to its previous highs. Short term targets are 15c, 25c, 35c, 55c, but I believe this stock will go to its previous high of 80c. In a gold boom, a rising tide raises all ships. We have the signal for the gold boom.
Andrew Sheldon www.sheldonthinks.com