The Sjuggerud Junior Gold Report Update
By Dr. Steve Sjuggerud
April 16, 2007
On January 9, 2006, I issued "The Sjuggerud Junior Gold Report" to subscribers of my advisory, Sjuggerud Confidential.
The report detailed my favorite tiny gold stocks, and the returns have been pretty extraordinary...
On average, the five gold stocks I recommended are up 99% since then.
Next month, at our True Wealth Gold & Commodities conference, I'll share a new crop of gold companies that could do just as well. I hope you can join me.
Let's take a quick look at the gold companies, why they went up, and which look best now...
Back in early 2006, I liked the idea of "gold hoarders"...companies that bought out huge amounts of gold in the ground at a time when it would have been unprofitable to mine that gold. Then gold starting going up...
I said in my Junior Gold Report:
"There are a handful of tiny gold companies out there that are so cheap, with such valuable gold reserves in the ground, that owning them is like having a gold option that never expires. In many cases in this report we'll be buying stocks so cheaply, for every dollar's worth of metal in the ground, we'll be paying a penny."
Since that report came out, the price of gold has risen from about $500 an ounce to near $700 an ounce today. So as you might expect, the stocks I recommended in that report have gone gangbusters. I listed ten junior gold stocks, and said to buy the five cheapest gold stocks on that list. As you'll see below, Seabridge Gold (which I wrote about a few days ago) wasn't even the best performer:
Name |
Symbol |
Price
1/6/2006
|
Midday
4/13/07 |
% Rise |
Gold Reserve |
GRZ |
3.77 |
7.2 |
91% |
|
Seabridge Gold |
SA |
9.49 |
17.24 |
82% |
|
Crystallex |
KRY |
2.47 |
4.13 |
67% |
|
Cumberland |
CLG |
2.49 |
6.98 |
180% |
|
Arizona Star |
AZS.V |
7.75 |
13.45 |
74% |
|
Even thought these stocks have soared by an average of 99%, they are still not that expensive...
First off, in general, they have increased their gold resources. And secondly, thanks to the rising gold price, it's now profitable to mine their gold, as I explained last week.
Here are the current values of the five gold plays I recommended:
Name |
Price per ounce of gold in the ground Jan 2006 |
|
Price per ounce of gold in the ground today |
Where’s the Gold? |
Gold Reserve |
$17 |
|
$23 |
In Venezuela |
Seabridge Gold* |
$34 |
|
$57 * |
In North America |
Crystallex |
$43 |
|
$57 |
Venezuela |
Cumberland |
$45 |
|
$156 |
In NA, but was bought |
Arizona Star |
$51 |
|
$116 |
South America |
* Remember, as I described in DailyWealth last week, this number could move down to closer to $20 as "inferred" resources are reclassified as "measured and indicated" resources. |
I love the idea of these stocks. Seabridge stands out on this list, having North American assets, and being very cheap, particularly when you consider the likely reclassification of its reserves this summer.
Out of this list, Seabridge Gold is the only great buy on a risk vs. reward basis. If you were looking to put new money into gold stocks, it's a great place to be.
A final reminder – True Wealth readers first learned about Seabridge Gold at our conference less than two years ago. This conference is where I invite companies with great prospects, but that are too small to recommend to a wide reader base.
This year, we've invited our biggest handful of companies ever. We couldn't whittle the list down. To learn about these companies and meet their key insiders, please join us at the True Wealth Gold & Commodities Conference in California at the end of next month!
Good investing,
Steve
Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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