An Undervalued Gold Pipeline

Posted by Michael Berry Ph.D

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We have been advocates of gold and silver exposure for some time now. Last week we wrote, “Gold and discovery opportunities abound and they should be considered.”  here are two such opps.  One is  a mature discovery play (Midway Gold) and one an incubator company (Terraco Gold).

This AM Chris Berry reviews Midway Gold’s (MDW NYSE AMEX) prospects.  Last week we conducted an in-depth interview with management of Midway Gold.

Both CEO Dan Wolfus and COO Ken Brunk are optimistic.  The recent drill results from Midway’s Spring Valley project are very encouraging. The PAN project should be open pit heap leach with an excellent IRR and NPV.  It should commence in 2013.

At Spring Valley Barrick must spend $30 million by 2013 to earn a 60% ownership.  Current spending about $9 million. The deposit, on the Black Ridge fault, already has a resource of 1.8 million ounces.  We think that will increase to 3 to 5 million ounces.  Grades are increasing as Barrick steps out to the north.

Please read this Morning Note.  The MDW shares are a value at the current price level and developments.

Also we like Terraco Gold  (TEN TSXV) immediately to the north of Spring Valley. CEO Todd Hilditch, Dr. Ken Snyder and Charlie Sulfrian think the Black Ridge fault zone may come north through their property.  The market went bid on both stocks last week.

I will be a speaker on the Kitco Precious metals symposium on September 12 and 13th.  Please tune in for a list of new gold opportunities.

Please be prepared with a layer of precious metal protection and discovery exposure along with cash in your portfolio.  Gold and silver continue higher this AM.

… it all HERE