IAMGOLD IAG

PARIS (THOMSON FINANCIAL) - Guyanas public board of inquiry has approved CBJ Caiman's three final requests for licences to open a facility for gold production by crushing of bed rock followed by cyanidation, a controversial process of converting gold into a water-soluble product which contains cyanide.

Chief investigators presented their report to the prefect of Guyana on Friday and will do so to CBJ Caiman this week.

'This shows the quality of our dossier,' Patrick Godin, chairman of CBJ Caiman, said.

The investigators' report is only advisory, and the dossiers must also go before Coderst (Guyana's departmental council for environment, medical and technological risks) and the prefect of Guyana, who will have the final say on whether to grant the licences, by decree.

Since November 2004 CBJ Caiman, a subsidiary of the multinational Iamgold Corporation of Canada, the worlds 10th-largest gold producer, has owned a concession of 30 square kilometres in Roura, at the foot of Mt. Kaw and within a natural reserve.

The site of the facility, situated at 'Camp Caiman', will occupy 370 hectares.

The board of inquiry wants to see the compensatory payments of 1.8 mln eur offered by the developer used on ecological and university projects at Mt. Kaw. CBJ Caiman expects to spend 70,000 eur per annum for seven years on restoration of abandoned gold-washing sites within the Amazonian Park of Guyana, a national park. At Camp Caiman, CBJ Caiman has identified minimal reserves of 34 tons of gold, to be developed over seven years.

Because the commodity bull will last OVER 20 years

it only STARTED 8 years ago

will make the TECH BOOM look SMALL


8:48AM IAMGOLD misses by a penny (IAG) 7.29 : Reports Q1 (Mar) earnings of $0.04 per share, $0.01 worse than the Reuters Estimates consensus of $0.05; revenues rose 114.6% year/year to $148.7 mln vs the $146.5 mln consensus.

I have three new gold stocks that I have added to my watchlist, Eldorado Gold Corporation (AMEX: EGO), IAMGOLD Corporation (NYSE: IAG) and Meridian Gold, Inc. (NYSE: MDG).

EGO appears to be a decent growth play with exposure to Turkish and Chinese gold mines. Quarterly revenue growth year over year is 383.60%. EGO has cash of 61.18M and debt of 66.36M. A high debt to equity ratio is something I don’t like to see.

IAG has a low debt to equity ratio. In the case of Meridian Gold they have no debt. A strong cash position and low debt normally means a company is in no interim danger of going out of business. Should the spot price of gold head southward IAG and MDG should be able to whether a downturn. Capital preservation should be an important focus of any investor. I build the majority of my watchlist’s with a medium-term 1-3 year focus in mind.

All three companies have positive ROA and ROE statistics. All three companies are trading below their 52-week highs. I am looking at the 52-week change in price to gauge the potential percentage gains an investor may see if the spot price of gold reaches a new high. At the time of writing this article:

EGO is off 10.84%
IAG is off 36.6%
MDG is off 29.6%

A cursory look at all three companies show them to be decent investments if you are bullish on the price of gold in the medium to long-term. As always it appears the market places an emphasis on growth versus value. EGO is off the lowest percentage from its previous 52-week high. The prices of all three stocks look attractive to me given gold’s current spot price of approximately $670 per ounce.

Most investment experts believe IAG will whiz right into the $10+ range in the next few months.

I keep hearing that but WHEN WHEN BOY WHEN

It is in fact a fantastic play.

This stock is under-priced. It won't stay at this low level.

Silver to Soar?

I caught an interesting Money Week article that echoes many of my own sentiments toward the price of silver rising. I found a few interesting points in the article that I would like to quote.

Taken from the article:

the US consumer is more indebted now since 1933 with little or no savings whatsoever. The Comptroller Auditor General of the US, David Walker stated “last year (2006) was the first year since 1933 that Americans spent more money than they took home and, as you probably recall, 1933 was not a good year for the United States.”

The US’ national gross debt is $8,883,212,488,519 trillion ($8.8 trillion) and growing. When George Bush came to power US’ national gross debt was $5.7 trillion. Even the most sanguine, tunnel-visioned bull would have to admit that the fundamentals of the US economy are bad and deteriorating.

The above quote certainly doesn’t bode well for the dollar. The declining value of the dollar is probably the current largest impetus behind the rising price of gold and silver.

Taken from farther down in the article:

In 1900 there were 12 billion oz of silver in the world. By 1990, the internationally respected commodities-research firm CPM Group say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to about 300 million ounces in above ground refined silver. It is estimated that 95% of the silver ever mined has been consumed by the global photography, technology, medical, defence and electronic industries. This silver is gone forever.

CBS Marketwatch published an article in March 2007 entitled ‘Silver may shine brightest among metals’, in which Kevin Kerr wrote that “Due to current supply/demand trends, the amount of silver above ground is projected to shrink to a critically low level in 2010. As supply shrinks, prices will keep rising steadily to new highs. Many in the investment world are unaware of this part of silver’s story. Industrial demand has been outstripping mining supply for the past 15 years, driving above ground supply to historically low levels.”

Assuming the figures in the article behind declining supply are correct, any combination of events to trigger investors seeking silver as an alternative currency will lead toward massive gains in the price of the metal.

At the moment there is a cesspool of potential reasons behind a rise in gold and silver:
# Declining value of the U.S. dollar
# Impending problems with sub-prime mortgage markets
# Implosion of the property bubble
# Implosion of global stock markets
# Japanese yen carry trade
# War in Iraq
# Terrorism
# Avian flu
# Natural disasters

The institutions simply need a reason, any reason really, to begin accumulating and strongly recommending the metals as an alternative currency. It’s difficult to go against the trend when you work for any major investment fund. Job security, bonuses and commissions are the major concerns behind any investment recommendation. When buying or profit taking starts it triggers a wave from multiple institutions. There is an overwhelming herd mentality in the gold and silver market. The fear from investment managers getting left behind and looking doe-eyed as other investors pile in, pile out or short positions, compromises the fundamental reasoning behind seeking gold and silver as a medium to long-term alternative currency.

I’ve written multiple times now that given the overall small size of the gold and silver markets, that major investment fund influence is evident from the increasing volatility and daily price swings in the metals. Investors should consider that a few large hedge funds exceed the entire size of the gold and silver market combined.

I suggest that if any of the events in the above list are of concern to you as an investor to build a physical position in silver or silver equities as a hedge. I am suggesting silver over gold due to the larger upside potential I see in silver.

A few silver miners on my watchlist include:

Coeur d’Alene Mines Corporation (CDE), Silver Wheaton Corp. (SLW), Hecla Mining Company (HL) and Pan American Silver Corp. (PAAS). I believe the first half of 2007 to be an ideal time as prices are stagnant for silver miners to being acquiring a stake in a few of your own favorite companies.