Our NYC-based correspondent Chuck Cohen, a consultant who specializes in gold investments, is so bullish on mining shares right now that he can barely contain himself. We’re hard-pressed to hold back ourselves, having recently disseminated a 492 target, 12% above current levels, for the Gold Bugs Index (HUI). We also expect the next surge in Comex Gold to push the December contract up to at least $1134, implying a rally of about seven percent from current levels.  Chuck’s latest dispatch is mainly a pep talk, but he concludes with a strong recommendation for a Canadian mining stock with an OTC listing in the U.S. The name of this stock, and its profile, can also be accessed at Rick’s Picks by clicking here. Here’s Chuck:

Ecclesiastes records,” There is a time for everything, and a season for everything for every activity under heaven.”  Today, King Solomon’s wisdom can even be stretched to the buying of  gold stocks, for there is a time for patience and waiting, and there is a time for action. This doesn’t mean I am at all putting down patience, for it is critical for success in this or any bull market. If you lack it, you will tend to buy impulsively, sell out  prematurely and be out when you should be in, especially in this historic market. I was taught this lesson back in 2004 when I grew impatient and bored with the lack of action in Virginia Gold, selling it for $.50, only to see it get bought out by Goldcorp shortly after. Within two years, Virginia was at the equivalent of $16.

But there is a subtle, yet major difference between patience, and, as the song goes, “Wishin’ and hopin’ and thinkin’ and prayin, ” as you wait for that theoretically perfect moment to buy. In the real world of stock investing, a buying alarm does not go off.

There is one caveat. This year some shares have gone up 5 or 6 times, and to buy them here is risky. But my key point is that after you have done your homework, considered all the details, and concluded that the investment seems right, you should simply jump into the fray. The main thing to keep in mind is that the junior gold shares are not meant for a quick profit or for trading in and out. You should be in them for the long haul, and if you miss the perfect buying point, over time it will end up seeming insignificant, especially if these stocks soar, as I expect them to.

Many of You Uncommitted

Why do I bring up this subject now? I can tell from my correspondence that although there is a lot of interest in the gold stocks, many of you have not yet made a commitment. Much of this caution presumably comes from two sources: 1) a persistently anti-gold media; and, 2) the “top-callers,” gold advisory services that are always more absorbed with trying to pinpoint a top than encouraging subscribers to stay the course.  Together they sew doubt and fear, causing many would-be gold investors to dither.

Take it from me: Stop dithering and get off the fence. This article is intended as a gentle nudge to get you off your duff.  In brief, here is why I believe the opportunity is ripe. 1) gold is at an all-time high; 2) some of the smaller companies have started to move up sharply;  3) gold has broken through a quadruple top at $1000 after a long consolidation and amidst a lot of skepticism; and, most importantly, 4) on the long-term charts, gold’s price is rising within a powerful parabola.

Anti-American?

Taking that first step can a big one because the gold sector might seem foreign, even anti-American. But like learning how to swim, gold investing will soon feel comfortable, especially as you ponder our unreal monetary policies and the overwhelming economic problems that confront us.  My advice? Take a deep breath and put in those buy orders, even if your natural impulse is to want to make that perfect entry and trade. That is not likely to happen.

As a wise investor once noted, if you get in within 10 percent of a bottom and out within 10 percent of the top it’s not skill, but luck.  But if you are going to get started and be successful in the junior mining sector, you’ll need to put aside that fear and uncertainty.  At this point in the cycle the wind is at your back and the move upward should soon pick up in intensity.

In-and-Out Discouraged

And what about taking profits? Until we reach a vastly overbought point, as I mentioned earlier, trading in and out is rarely wise or profitable. First, you may have taxes and commissions to pay, and in the smaller exploration stocks wide spreads between bid and asked must be taken into account. Second, you have to be pretty sharp in your timing, and my experience is that it is not as easy as the advisory hucksters make it sound. But with any luck, that will be a happy dilemma to discuss in a future article.

The landscape in the junior and exploration shares is about to change dramatically. Until now most gold investors have been conditioned to expect sharp setbacks. But once this thing blasts off, the pattern will change. Again, I suggest that you go back to look at the Nasdaq from 1987 to 2000 to see how its pattern of sharp sell-offs eventually morphed into a buying frenzy. Sooner or later this will happen in gold, except that it will be even crazier and go on for a longer time. Now for the stock pick you were promised:

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Recommended:  General Predator

General Predator Royalty & Development Co. [GPD.V; American symbol: GPRXF] is a relatively new gold mining company, but through the aggressive vision of its management, the firm has already put a lot of projects and properties into play. It is one of my favorites and has interesting warrants, although they are currently available only in Canadian dollars.

As I do with all of my recommendations, I’ll suggest visiting the firm’s web site, www.GoldenPredator.com, to familiarize yourself with the latest corporate information. GPD reminds me of Seabridge Gold when it first formed: a very aggressive and well funded company with a real plan. Seabridge went from $0.15 or so to a current $26.  

The following report comes from management, whom I know: “Our mandate is to establish a self-funded precious metals exploration company focused on exploring for and developing world class gold deposits in the Yukon’s Tintina Gold Belt.  (Access the Underworld drilling report on this site, out Monday, by clicking here. 

• Company has two 43-101 resources (Brewery Creek, Taylor)- both of which can be expanded
• Brewery Creek, Yukon has a mining license and a water permit in place to 2021 and that means it can move into mining as soon as we elect to do so.  Said election to be determined after comprehensive drilling program designed to significantly increase the resource
•  GPD is partially self-financed through its passive royalty stream expected to be $1.2M in 2009 – It will have 4 million shares of EVG.V in February. This royalty stream is expected to increase materially when Barrick Gold’s Bald Mtn. Mine produces from our ground
• Joint venture partner, Madison Minerals, is planning 43-101 on our Phoenix Lewis property, which immediately adjoins Newmont’s Phoenix Mine
• It is drilling several Nevada properties with bonanza-style gold and intends, through its two mill sites, to become a mid-tier precious metals producer. We are getting high grade results from this program and expect to continue to do so (Golden Ridge is part of this in California). Note – There have been some spectacular drill intervals reported from Angel’s Camp, Golden Ridge and Adelaide where we have just begun drilling again
• GPD owns 100% of the Taylor Mine and Mill with a 43-101 silver resource of about 15 million ounces (Hester, 2007). The resource that we quote in the recent press release is open at depth and along strike. Very little previous drilling was focused on the high grade feeder structure. Based on our drilling this spring we are confident that we will be able to increase the overall grade of the deposit with continued targeted drilling of the structure. Also, if our last news release is confirmed by current third party testing, the deposit will become significantly economical
• It is aggressively exploring Gold (Scheelite) Dome, Antimony Mountain and Brewery Creek in the Yukon and more results are expected. GPD is also looking to acquire more properties should the right ones be determine

In summary, GPD is creating a self-funded company to look for mammoth gold deposits in the frontiers of the Yukon…..funded by the increasing royalty stream, non-core asset disposal, and most importantly – Nevada high grade production focus expected within the next 6 quarters.  To close with another passage from Ecclesiastes (9:1).  “The race is not always to the swift, nor the battle to the strong.” 

Full disclosure: I own both the common stock and the warrants. And a word about my services: I can help you get started with a coherent investment strategy. If you have any questions, please contact me by clicking here. References available.

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