Was Joe invited to the party?

There is an interesting news release out today for a major gold company I used to own. Here's the beginning of it:

"YAMANA GOLD INC. (TSX: YRI; NYSE: AUY; LSE: YAU) today held the official inauguration ceremony for its Gualcamayo gold mine, coinciding with the completion of its first quarter of commercial production. Gualcamayo is a significant operation for Yamana in Argentina where the Company's interests include a 12.5% interest in the Alumbrera mine and several development or near development projects including Agua Rica.

Working in collaboration with both the community and appropriate governing authorities, Yamana was able to develop the Gualcamayo mine quickly. Construction of the Gualcamayo mine was substantially completed in less than 20 months following receipt of a positive feasibility study and the start of construction in August 2007. The processing of ore at Gualcamayo began in late December 2008 and Yamana declared commercial production on July 1, 2009. "

It goes on to say that the president of the country, the governor of the state, and many other dignitaries were there. But I wonder if Joe was invited? Certainly Yamana is a major player, it has an $8.5 billion market cap. But the thing that I was looking for was not mentioned... and that is that Joe's little company has a 1% Net Smelter Royalty (NSR) on this mine... and that means it gets 1% of the revenue of what is smelted for no cost. Might not sound like a lot, but it is a pure cash payment for no cost or work... and an asset that can be sold for a chunk of cash.

The company is GRG-V Golden Arrow Resources, last traded today at 28.5 cents, and has a market cap of $8.5 million, or 1/1000 the size of Yamana. What is the 1% NSR worth? Well it depends on the price of gold and the production, but it is estimated to be at least double the current value of the company. Furthermore, Joe Grosso and his team have been in Argentina and area since 1993 and now have about 40 properties to work on, one of which is right next to the new Yamana mine.

So GRG is a gold explorer with an asset worth more than it's market cap which provides a quarterly income, some cash in the bank, and a large inventory of prospective properties to drill on. As well as loads of connections on the continent.

So I am not sure if Joe was invited to the party to hobnob with Presidente Cristina Fernandez de Kirchner, but I for one think he should have been...

Gold - the long awaited $1,000 breakout!

Okay I've been a gold bug for many years, both to my benefit and detriment... I try to treat it in a more detached way, but there's just something about it...

So all bias aside, the chart does look like it is breaking out. Check out the weekly chart... it is the 3rd attempt at $1,000 since early 2008, all MAs are moving up , it is not overbought on RSI, and best of all it looks like a long cup and handle formation which is one of the most reliable. A year after the crash, a long awaited breakout may be happening now.

But it is hard to find many stocks that haven't already moved up lately. Not to say they won't continue but I prefer bargains... The only one I bought this week was VEN-T Ventana Gold, who seem to have found a potential elephant in Colombia. It has already had a great run from a 52 week low of 4 cents to today's close of 5.80... yes quite an amazing move... I bought at 5.52 after they had more impressive results, but mainly as the chart has been consolidating in the $5-6 area and looks like it is ready for it's next move. But I am playing this as a momentum play, and have put in a tight stop at 5.29, so quite likely I will get tossed out unless this is the breakout. If so I will step back and monitor.

There are many good gold/silver juniors, some I own include LMA-T, MMM-T, FVI-V... am holding but not buying as they are up a fair bit lately. Once gold breaks $1000 and stays there (like maybe next week...) all gold stocks can be good things to hold onto.

For less risk you can buy bullion or an EFT that tracks it... or HGU-T which attempts to doubles it's move up.