We think it must be the “better to push on an opening door” syndrome!

The miners are being outshone by the metals themselves. Yet mining shares continue to outperform the general market. The FTSE Global Mining Index was up 10% in the first half, compared to a 13% decline in the FTSE Global All-cap Index.

Miners of gold, however, have not been among the best performers… yet!

Still if these forecasts materialise, the worst could be over for some. Take Randgold Resources (NASDAQ:GOLD), a mid-tier explorer, developer and — importantly — producer in Africa.

Randgold first roused our interest back in July 2007 when the share price hovered around R12. By April 2007 it reached R28 — a gain of more than 130%!

But then, it all started to go wrong…

Then the slide began, as a result of cost and production fears. More than a third of its value was wiped out, along with other mid-tiers.

But Randgold still has all the ingredients for success. Chief executive Mark Bristow is not deterred by a market driven “purely by instant gratification”. He is going for continued “organic” growth. That means Randgold finding its “own gold, so we’re not forced to buy ounces at a premium by the demands of a bull market.”

Hitting its targets by 2011 will increase attributable annual production from Randgold’s West African mines by 50%. The figure will be a whopping 600,000 oz.

Randgold has great key objectives — to make falling output and ore grades a thing of the past and to aggressively tackle soaring costs. It may have raked in higher gold prices this quarter, but cash costs were up 47%.

In spite of that, net profits still rose 42%. And the production pipeline holds promise. Two existing open pit operations have just produced 63,249oz at a cost of $470/oz . They are on target to deliver 265,000oz this year. A new high grade underground mine has started to deliver, too. By 2010 it will be producing 400,000 oz — result! Another is in the final planning stages.

Randgold has its fingers in plenty of pies

Its project in the Ivory Coast is enjoying a “steady improvement in the political climate”. Randgold has also recently announced a 52% increase in the more reliable “probable” reserves category.

In a world where production is falling, new deposits are crucial. Randgold has a good track record here. In Tanzania, it has decided to enter phase two of the 500,000 oz joint venture with AIM-listed African Eagle (LON:AFE). A geological model has given good reason to do so.

All in all, Randgold’s net profits could increase by as much as 70% this year, Bristow reckons. Not bad!

And it is scanning the horizon for more! Africa may be Randgold’s “home-turf”, but it is not averse to taking its skills elsewhere to new and profitable gold targets.

So, keep mining,

Erin and Isabel

Source: Randgold Still Has the Ingredients for Success

The Five Reasons Why Now’s the Time to Buy Junior Miners

Gold could be ready to end the summer doldrums even before summer begins.

The most relevant area of resistance in the way of this outlook is the 30-point range between $890 and $920. If gold can break through and find support at these values it will be poised to rise for the summer.

With that said, I think we’ve had our seasonal low and now it’s gold’s turn to shine…as the most preferable commodity…and better yet, to become money again.

Just writing that makes me realize how early in the game it still is. Who today would believe gold will become money again? Yet, at the top of the market everyone will.

Here is the best opportunity for us right now…

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Michael Jackson does nothing and collects royalties every time a Beatles song plays on the radio (he bought the rights years ago). But Paul McCartney — now a billionaire — does nothing and collects even more on the 3,000 song rights from other artists that he owns.

Today, you can do the same…and you don’t have to buy song rights. We got something even better. Check it out here…

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The Five Best Reasons to Buy Good Quality Precious Metal Juniors

Most of the small-cap and junior resource market has been in decline since gold first broke the $700 level back in 2006. But that’s all about to change, I have five reasons why you should buy juniors now before the window closes — lets get started…

Reason #1, is that, several depressing factors have come together to produce an early seasonal low, at least for the precious metals sector.

Reason #2, as implied in the introduction, gold has lagged the commodity cycle because the market is infatuated with the growth in developing countries, and has inferred a “realness” to their demand for commodities. I’ve never disputed that the growth exists… just that there is a lot more inflation, and that inflation is what drives prices higher.

I believe the gold market is at a bullish inflection point — a point of recognition of sorts.

Reason #3, the precious metal juniors have hardly benefited from the bullish trends in these commodities to date, especially since 2006, never mind the future.

Lots of money found its way into the junior segment over recent years, to be sure, but this expansion in capitalization has been dilutive. The Canadian Venture Exchange (CDNX) has had a hard time keeping up with gold itself, and is at its lowest level relative to gold since 2002. Simply put, the juniors should be tracking gold — and right now they have a lot of catching up to do. The result is a widening gap between the values of majors and juniors. In my mind, that gap will soon contract.

With that said I think it’s the best buying opportunity in this segment since 2002.

Reason #4, The money that has poured into the junior precious metals segment over the past few years has been soundly invested. I am impressed with the value that I’ve seen many juniors create throughout this cycle — the development of assets discovered back in the nineties has been astonishing.

Finally, the best reason to own these juniors now…

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Why Has Oil Surged?

Dwindling value in the dollar, a crisis in U.S. credit, rising demand from overseas. These are all explanations for the recent surge in oil prices. But that’s not the whole story.

There are more dangerous and deadly reasons for the rise in oil prices, and the real truth explains why we can expect this surge to last for a long time to come. Click here to read about the “bloody backlash.”

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Reason #5, the next takeover wave!

Many of the large-cap producers are priced for growth, and they know that if they want to sustain those multiples, they’ll have to buy or find reserves. That’s the incentive.

Meanwhile, the juniors spent lots of investment dollars proving up their assets, and the market has ignored them. So they are ripe for acquisition.

And, the majors have plenty of cash, thanks to the latest run in gold prices.

Some, such as Agnico Eagle have said they’re on the hunt, while others like Gold Fields are obviously in need of assets outside of South Africa. Corrections in the price of gold won’t discourage them.

There’s your ammunition, five Solid reasons to make sure you are small-cap and junior miners. These miners won’t remain at these levels long, so now is your chance to get in!

I’m working on a more comprehensive target list as we speak. I see a window of opportunity between now and the end of this gold price correction to buy the good quality small-caps and juniors before they take off. The window could close earlier than you think.

Regards,
Ed Bugos

P.S.: So now you know the reasons why you should be in the small-cap and junior miner game. There has been a recent downtick for gold, but that should not last. Readers of my Gold and Options Trader service have seen not only the reasons to buy junior miners, but they’ve gotten my personal recommendations instructing them which miners to buy and when. Want to know what I told them? Click here to find out…

Source: Small Cap and Junior Miners