Tuesday, November 15, 2011

Let's look at a couple of Gold Stocks: CBJ-V AND LAD-V

I've been looking at gold juniors—well actually all gold stocks. I think gold juniors have the the greatest potential for the greatest return given their position in the bull cycle. AND we are nearing M&A season in the cycle—time for the bigger to swallow the smaller in a drive to build add to their reserves.

On the bottom edge of the juniors I have a two I am looking at today.

CB Gold (CBJ-V: TSX)
Excerpts from Stockwatch Business Reporter:

"Two weeks after revealing impressive assays from a drill hole at its Las Vetas gold property in Colombia, CB Gold Inc. has toned down the excitement with, as requested by the British Columbia Securities Commission, restated assays including a top cut. A top cut reduces (or cuts) an uncommonly rich assay, usually a short intersection, to a lower assay -- say from several hundred grams per tonne gold to 50 g/t -- and then the average of it and other assays is recalculated.

"In its earlier news release of Oct. 24, CB Gold reported a 114.98-metre interval of 7.57 g/t gold, including 2.09 metres of 316.67 g/t gold, but used no top cut in its calculation. There is no suggestion the company tried to conceal the narrow intersection of extraordinarily high gold."

"...With a 60 g/t top cut, CB Gold's 114.98-metre intersection drops to 2.54 g/t gold, and with a 15 g/t top cut, it falls to 1.2 g/t gold, as stated in the company's Nov. 8 press release. The company says it has not explored the property enough to define a mineral resource, and investors will have to wait for more drill results. "

From their website: http://www.cbgoldinc.com

"The Vetas Gold Project is a combination of small producing mines and detailed exploration over adjacent areas. Although historically there have been a number of small underground mines producing gold near the village of Vetas, District of Santander, the project is at an early stage of development. Prior to CB Gold's acquisition of the properties, at least eleven small underground mines were in production, but no systematic underground exploration and development, or surface exploration, was carried out on the property by previous owners.

"CB Gold has acquired interest in nine mining titles, of which six are registered in the name of the Company. All nine properties host quartz veins containing high grade gold and have historical production. In total, the project covers a total area of more than 1,000 hectares in Northeastern Colombia"

So we know there is gold there. Question is: How much? For me the simple fact that there is a lot of historical activity and that the property has has no systematic exploration makes this one a definite watch and wait—wait for opportunities to accumulate. IMO this one would rise in value significantly if their next drill holes continue to produce higher grades. Ultimate value though will depend on the cost of production. You can find their Fact Sheet here.

New Carolin Gold Corp. (LAD-V: TSX)

Another company which owns a property with a history of gold mining. New Carolin Gold Corp. is a company who's share price makes it look like a long shot, until you look at its fact sheet (downloadable here). So I like it—I'm all about looking a couple of these potential multi-baggers!

New Carolin Gold Corp. is a new company with a historic gold mine on a known trend, the Coquihalla Gold Belt. The original Carolin Mine still has its sign on British Columbia's Coquihalla Highway and a road that leads into the mine property. Their Fact Sheet sums up their starting position for my numbers quite well and speaks volumes about the people behind this deal IMO.

Just looking at its recent NI 43 101 on the tailings from the original Carolin Mine gives it 29,000 ounces of gold which gives a share value of between .42 and .85. Historical drilling inside the mine shows the resource to be open at depth.

It is my belief that there is very little risk to the downside for shares of this company, in my opinion. Therefore this one for the watch list and in the interest of disclosure I have bought shares in this company.

As always do your own due diligence put them on your watch list and then review any buying decision it with a qualified professional before investing in either of these companies.

Trade well and prosper.


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