TFN Reader’s Grapevine Pick: It is a fine time to be a gold miner
Today's Financial News - Posted August 5, 2009
With gold prices on the rise, the world’s miners are enjoying increased margins. If there was ever a time to invest in speculative miners like Lake Victoria Mining Company (OTC BB:LVCA), it is now.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): It is time to pick another fruit from the TFN reader’s grapevine. This time Bruce asks us to take a look at a tiny Colorado-based gold miner, Lake Victoria Mining Company (OTC BB:LVCA).
While the company may pay its taxes in Colorado, its operations are in Tanzania, which happens to be the third-largest gold producer in Africa.
Before you go running off to grab the company’s $0.68 shares, let me remind you any company with a market cap of just $19 million is highly speculative and volatile.
The company is extremely risky because it remains in the critical exploration and development stage.
According to the company:
“The key objective of Lake Victoria Mining Company, is to identify and acquire resource properties that have a high potential for a proven resource, and to establish one or more “proven resources” and progress from a resource and exploration company to a mining company.
“Once a resource property is acquired by Lake Victoria Mining Company, the immediate goal on each property is to conduct sufficient field exploration to establish a “proven resource”. The value of a property containing a “proven resource” is dramatically more than that of one with a potential resource.”
Lake Victoria Mining Company did get a “nugget” of good news recently. Word that a set of assay test revealed 2.75 grams of gold per metric ton of material is the equivalent of proving that the needle is actually in the haystack (more succinctly that a pile of dirt had some gold in it). Now the company just needs to find the needle.
The big question for the company, and all exploratory-stage miners, is will it hit pay dirt before funding runs out.
Of course there is a multitude of variables, including the availability of credit, but with gold prices high and looking to go even higher, the tiny miner has improving margins on its side. As long as it finds some gold, it will help the company’s cash flow.
This is one aspect that significantly lowers the risk across the entire sector.
If there was ever a time when the company could flourish, it is now.
Check out the stock, research the company and do more than enough due diligence.
If you like what you see, do not chase this quick-mover. Your absolute top should be $0.65, with $0.60 a more preferable entry price.
Unfortunately, the mere mentioning of this company on our site is likely to boost share price. That is good for Bruce, but bad for you.
Wait out the bump and buy only when the time is right and only if you can handle significant risk.
Next Article: Increasing margins: Burning the house to save money
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