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The Company's Eagle Gold Project in Yukon Canada hosts a National Instrument 43-101 compliant Reserve of 2.3 million ounces of gold.

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Message: Gold Price Surge Likely to Stimulate Large Money Flows into Top Tier Jr Gold Exp
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Gold Price Surge Likely to Stimulate Large Money Flows into Top Tier Jr Gold Exp

posted on Sep 16, 2009 10:27AM
Junior gold exploration companies are usually the last stocks in the gold stock sector to catch on fire - the same was true when gold last hit historical highs at $850 -nearly 30 years ago. With gold bullion surging in price ($1,020 today) and the US Dollar in a free fall, IMO, it won't be too long before you see a surge in money flowing into the tiny junior gold exploration companies. Top tier junior gold exploration companies will get the lion's share of the new money flows into the junior gold exploration sector and it won't take much new money flows to really kick this sector into high gear. To give you an idea of how small this sector is just look at Robert McEwen's junior gold index that is composed of 30 top tier junior gold exploration companies that all have proven reserves in the ground and are near production status - the entire value of all thirty companies is only 18.2 billion - and 40% of that total is accounted for in only 4 of the 30 stocks. Just imagine the impact what a few hundred million dollars of new money into this sector would do to the better stocks in this sector - the percentage moves could be multiples of where these stocks are today.
Take a look at McEwen's Junior Gold Index point and figure chart show below - you will note that this index is still 50% below its two year highs in November 2007 (index is now at 8.22 and its former high was 18.50). So far this index rally from its lows last year has been a bear market rally since the index remains below it bearish resistance line which is represented by the diagonal line of "*****'s" -- once this line is broken to the upside, a new bull market will emerge in this sector - a print of 11.00 for this index will do the trick. Currently this chart is on a double top buy signal and is in a column of "X's" indicating that DEMAND is in control - a print at 10.00 represent another double top buy signal - taking out its June highs and putting this index only a stone's throw away from breaking out above its bearish resistance line.
My favorite stock in the junior gold sector is Victoria Gold which I regard as a top tier exploration company that already has gold reserves in the ground and is likely to be into production by the end of 2010. Currently trading at .385 Canadian, this stock is down from its two year highs at 1.60 Canadian. With an expected surge of new money flows into the tiny top tier junior exploration sector in the coming months, IMO, VIT will is get it fair share of new investment capital driving this stock up to multiples of its current price.
Mc Ewen's Junior Gold Index
18.50 X x
18.00 B 0 x
17.50 x 0 x
17.00 x 0 x
16.50 x 0 x
16.00 A 0 x
15.50 x x 0 x x
15.00 x 8 x 0 x 0 x
14.50 7 0 x 0 x 0 x x
14.00 x 0 x 0 1 0 2 3 x
13.50 x 0 x C 0 x 0 x
13.00 0 x 0 x 0 x
12.50 0 9 0 x 0 x
12.00 0 0 0 x x
11.50 4 x 8 x
11.00 0 x 0 x
10.50 0 5 0 x
10.00 0 0 x
9.50 0 6 x
9.00 0 x 0 9
8.50 0 x 0 8
8.00 9 x x 0 x
7.50 0 x 0 5 0 x
7.00 0 x 0 x x 0
6.50 0 x 0 x 0 x
6.00 0 A 1 0 x
5.50 0 x 3
5.00 0 x
4.75 0 x
4.50 0 x
4.25 0 x x
4.00 0 x x 0 x
3.75 0 B 0 x 0 x
3.50 0 x 0 x C x
3.25 0 x 0 x 0
3.00 0 x 0 x
2.75 0 0
2.50
07 08 09

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