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« Gold-Prices.biz: Portfolio Update 15 April 2007 | Main | SILVERADO GOLD MINES LTD: Up 20.8% in 3 days »
Thursday
Apr052007

Staccato Gold Resources: BUY

Staccato is a exploration company which is involved in the acquisition, exploration and development of mineral properties, in particular gold.

Staccato Gold Resources

Staccato Gold Resources is exploring for gold in the world famous gold producing trends of Nevada, USA. Their experienced management team regards Nevada as “the world's best gold exploration jurisdiction for geological, regulatory, environmental and currency reasons”.

I quite agree with them. Places like Nevada are ideal for mining and general investment. There have been many companies that discover decent deposits but their stock price does not benefit as some investors are largely not prepared to put their money into politically unstable countries such as Venezuela and Bolivia.

Currently Staccato has five gold exploration projects in some of the most well known gold areas and trends of Nevada, such as the Carlin, Cortez/Battle Mountain and Independence Trends. Two of these properties have resources totally more than 615,000 in inferred, indicated and measured sections, in compliance with 43-101 standards. With a market cap of $32million, this means that Staccato is currently traded for little over $52 per ounce in the ground, less than 10% of current gold prices. Their ICBM property is being run as a joint venture with Barrick Gold, which gives us great confidence in the deposits, as a prominent gold miner of Barrick's expertise and reputation is prepared to invest in Staccato. Alongside Nevada, Staccato has operations in Vancouver, B.C., Canada.

Staccato Gold Resources Eureka Trip

When it comes to exploration stocks, everyone dreams of owning stocks that are going to go through the ceiling, but in reality by the time the stocks go through the ceiling, the money has already been made. To make money in the exploration business, one has to buy stocks before they rocket, or buy on a pullback. We currently think that Staccato is at a fairly good point to make a purchase although we have been watching it for a long time. However the stock went precariously high and so we had to wait until it came back to a suitable level to buy.

The stock had been in a down channel, but it has broken out of this channel now and the next technical area that it may find problems with is breaking the 50dma, but we are confident that it will do this soon. The next technical area is around $0.70-$0.75 but once that is broken there really is no limit on where the stock could go, technically speaking. But some investors may wish to wait until these areas of resistance have been broken before investing.

Staccato Gold Resources Stock Chart

However, with small exploration companies the key to their success really has little to do with the chart, although this effects whether investors buy the stock to some extent. The fundamental driver is the exploration program, and how it is progressing. Staccato doubled their resource base in November and they continue to aggressively explore for additional gold resources and their success in doing so is pivotal to the well being of the stock price.

As you can see from the chart this gold stock, along with many other small exploration stocks, is extremely volatile. Therefore this stock should be reserved for “Vegas Money” as it is a long shot at success and should be considered an investment with money you can afford to lose and/or leave invested for a undefined period of time. This is a “speculative” stock to put it lightly, but to be frank it is a bit of gamble.

Nevertheless here at www.gold-prices.biz will believe that this is a risk worth taking and so we will be buying this stock at its current level of CAD$0.62. You can keep updated on what gold stocks we are buying, when we are buying them as well as ideas on the gold market in general by subscribing to the Gold Prices Newsletter.



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Reader Comments (1)

Good technical description of Staccato.
I must say though they are very poor at keeping investors up to date. Their web site could do with an overhaul. Compared to other companies it is at the bottom of the list with two rather pathetic postings from 'analysts' They announced a resumption of drilling for Jan 15 yet 4 months later we have heard nothing. Even at this low price I wouldn't inest(sic) another dime unless they can respond to serious investors.

May 6, 2007 | Unregistered CommenterHarry Plummer

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