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« Gold Stocks Leading The Way In Next Correction | Main | US Sub-Prime Problems Surface Down Under! »
Jan152008 Portfolio Update 16 January 2008

As the main members of the team have been on the road for the last three months, travelling over the UK, America, and to Fiji before going down under, we have not been able to do our monthly portfolio update since October. Much has changed since then and so we have updated our portfolio to show where we stand on the various gold stocks that we follow.

Firstly, we are not recommending any buying at these levels as we view many gold stocks, and gold itself, to be overbought and we could be in for a correction of some kind.

We felt that gold was due for a “major rally” at the end of the summer and we gave multiple BUY signals on gold stocks throughout the summer, at the height of the “credit crunch” drama when gold stocks hit a low. More recently we felt that gold was simmering and ready to take off to new level once it broke up out of a symmetrical triangle formation.
Gold prices have indeed risen to new levels, in fact past their all time nominal high as they stand at over $900 as we write! Gold is up 35% since the summer and the HUI has gained about 50%. Some of our gold stocks have done even better, such as Kinross Gold, which has almost doubled since the summer.

The following is a summary of the gold stocks we are following and where we stand with our positions at the moment:

Agnico Eagle (AEM) we paid $30.88 and it now stands at $58.09, showing a profit of 88.1%. Agnico Eagle did creep into 100% profit, but the price has eased slightly in more recent trading.

Kinross Gold (KGC)
we acquired at $10.08 and this stock now stands at $22.33, for a gain of 121.5%. Kinross went through a bit of a pullback so we signalled to our readers to “Add To Holdings” at those discounted levels of around $11.66. We also gave another ‘Kinross Gold BUY’ signal when we purchased more of this stock on the 20th August 2007 for $11.48. This means that the stock has roughly doubled in the five months since our BUY signals!

Silverado Gold Mines (SLGLF) we bought at $0.08 and it now stands at $0.07. The green fuel side of the business is continuing to make progress with the announcement that Silverado has contracted with Pickering, Inc. of Jackson, Mississippi, to provide complete architectural and engineering plans for construction of Silverado’s lignite water fuel (LWF) demonstration facility of their first project, the $29 million coal to oil operating plant, nothing new to add at the moment.
The Nolan Heights project continues to make good progress where the company has said that a “High grade trend appears to be developing” and we will hold and watch as Gerry Anselmo and his team try to locate the Mother Lode of gold. We had expected this stock to move up with the gold price however it does appear to have a mind of its own and will no catch us by surprise with the next positive news release.

Yamana Gold Inc (AUY: NYSE)
we paid $9.37 on 27 September 2006, it is now trading at $16.16 for a gain of 72.4%. Yamana had been making good progress in both production and in the area of acquisitions, so the market capitalisation of this company is now $5.75 billion. We bought again at $12.89 on the 7th December 2007 and so that call is up 25.3% is just over a month.

Canarc Resource Corporation (CCM: TSX) we added Canarc to our list and have been observers for some time. However this stock does not fit our investment criteria and we are removing it from our watch list, although we wish the company the best of luck in the future.

Staccato Gold Resource Limited (CAT: TSX.V) this is a speculative buy and we made a small purchase on 5th April at $0.62, the stock is very volatile and currently stands at $0.23.

High River Gold Mines: (HRG: TSX) We bought this at $2.49 and it is now trading at $3.00 for a 20.4% profit. We recently increased our position in the company as we strongly believe in the company's long term fundamentals.

Fronteer Developments Group (FRG)
Fronteer was originally bought as both a uranium and gold play as FRG owns the lion’s share of Aurora Energy Resources making it a gold/uranium play.
Fronteer is currently trading at US$10.51. Our original purchase was made on the 15 July 2006 at around the $4.70 level for a gain of 123.6%. On the 24th September 2007 we sold 50% of this stock for an average price of $10.44, banking a profit of 122%. Should there be a decent pullback in the price of this stock we will become buyers once again, otherwise the cash will be re-invested in this sector of the market when the opportune moment presents itself. However at the moment FRG is not rising as much as other gold stocks, perhaps because of its exposure to Aurora and the uranium market, which is undergoing a correction/consolidation period.

We are very pleased with the progress of our gold stocks in recent months and despite our view that gold and gold stocks are looking overbought, we are confident that in the longer term these stocks are heading much higher as gold heads towards (and beyond) our target of $1000 for 2008.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

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Reader Comments (2)

Congratulations on some impressive and profitable stock picking. You guys are good, and I enjoy your email reports.
Keep up the good work.

January 16, 2008 | Unregistered CommenterJim Curtis

Thanks for that - always gives the team a boost when we get such a kind and generous comment.

January 17, 2008 | Unregistered CommenterGold Prices

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