As our regular readers are aware, the editors of StockUpTicks are fans of gold as an investment vehicle. We’ve published in the past our concern over the devaluation of the U.S. dollar and geopolitical conditions that have caused us to look at gold and more specifically, gold related public companies.

And despite our frequent trips to gold and natural resource company showcases in Vancouver, San Francisco, and Palm Springs, we chose but one gold related public company to feature this year.  That’s it.

That company of course is Tonogold Resources (Pink Sheets: TNGL), which we first brought to your attention back on November 9, 2005 when it was trading at just .25 cents.  Just last week Tonogold exceeded $1.00 in intraday trading.

This is a spectacular and unexpected return. We’re not taking credit for that.

But we will take credit for being bullish on gold and gold stocks and for keeping a keen eye on opportunity. We clearly expected good things to happen and we’re continuing to focus on opportunities in gold, metals and resources in general.  Expect to see more great stories like Tonogold in early 2005. We’re out looking for them.
 

CEOAccess Audio Interview: Hear it Directly From the CEO

Francis Gaskins

Once again, our analyst and host Francis Gaskins, has brought out intriguing morsels  of information for you to contemplate.  Tonogold Resources (TNGL.PK) CEOAccess Interview Featuring Jeffrey Janda, CEO of Tonogold Resources,  with Francis Gaskins, Editor of  IPOdesktop.com

SmallCap Sentinel: Potential Hoarding Could Spark Heightened Interest in Uranium

Press Release Source: SmallCap Sentinel - Tonogold Resources
Thursday December 22, 11:41 am ET 

IRVINE, Calif., Dec. 22, 2005 (PRIMEZONE) -- "Uranium prices could skyrocket if nuclear power producing entities, which rely on uranium, begin to hoard the metal," said SmallCap Sentinel analyst, D.R. Clark. "It's a very small part of their operational expense, so they can't afford not to have it, lending credence to a theory that power plants might begin to make major moves on the metal. Leading metal minds Paul van Eeden and James Dines have echoed similar sentiments with Dines tilting toward the possibility of a run on the vital metal.

"Given the heated world market for uranium, it should come as no surprise that a mining company like Tonogold Resources (Other OTC:TNGL.PK - News) would secure a lease for a lucrative uranium project in New Mexico," Clark noted. "Tonogold president Jeff Janda has referred to the area where the claims are located, the prolific Grants Uranium District, as a 'historic top producer.'"

The informational report, "Investing in Metal-Related Stocks for the SmallCap Investor" has been made available free of charge at http://www.SmallCapSentinel.com and will address gold and uranium-related equities, such as Cameco Corporation (NYSE:CCJ), Uranium Resources, Inc. (OTCBB:URIX.OB), and Energy Metals Corp. (Other OTC:EMCKF.PK).

A company profile on Tonogold is available HERE

The entire News Release may be viewed HERE
 

By the way, the SmallCap Sentinel report on metals, authored by StockUpTicks’ team of writers is among a bounty of interesting commentary and market intelligence available at SmallCapSentinel.com   But because we believe this is content that every one of our readers should review, we have excerpted the report below.

We’re onto something. Something we’ve been waiting on for a long, long time. It’s an opportunity with potentially exponential possibilities in one of history's most treasured commodities. About a year ago, a trusted investment mind started to preach to us about the virtues of gold-related public companies. He made several sensible arguments as to why gold had to increase in value and the various investment plays that could be made based on that belief. 

We were at first skeptical. We’d heard “gold bugs” before, but this fellow had a track record of enormous success and his argument was sound. We agreed to listen more and decided to, pardon the pun, do a little digging ourselves. In November of 2004 we went to an investment conference in San Francisco showcasing gold mining companies and meeting with several dozen CEO’s of public gold companies. As we learned more and more about the business the pieces started to come together and we, the editors, began to see the opportunity as our sage friend sees it. 

Next we explored the geopolitical and macroeconomic factors that could affect this perspective on gold – no light reading. We spoke to analysts and politicians alike. We visited the major gold show in Vancouver, Canada in January where we spent many hours speaking with CEO’s one on one, scrutinizing their business plans and quizzing the all important geologists. We took them to lunches and breakfasts and gained what we think is a unique perspective on the gold market. 

At last we believe that the results of our months of research may be ready for your perusal and we’re going to be making a dedicated effort to introduce you to gold opportunities in our usual straight forward and hype-free manner. With gold now up significantly since our first forays a year ago, there might not be a better time to examine the public companies that are mining the ore from the Earth. 

Some of the Companies leading the way in gold-mining are:

Placer Dome, Inc. (NYSE: PDG) engages in the exploration for, and the acquisition, development, and operation of gold mineral properties in Canada, the United States, Australia, Papua New Guinea, South Africa, Tanzania, and Chile. Its products include gold, copper, and silver. As of February 23, 2005, the company had interests in 17 mines in 7 countries. As of the above date, Placer Dome owned 60% interest in the Cortez Hills project, 100% interest in the Pueblo Viejo project, and 30% interest in the Donlin Creek project in southwest Alaska, as well as indirectly owned 51% interest in the Cerro Casale project in Chile. Placer Dome is headquartered in Vancouver, Canada.

Barrick Gold Corporation (NYSE: ABX) operates as a gold mining company with operating and development properties in the United States, Canada, Australia, Peru, Chile, Argentina, and Tanzania. The company has 100% interest in Goldstrike Property, Nevada; Eskay Creek Mine, British Columbia; Holt-McDermott Mine, Ontario; Pierina Mine, Peru; Plutonic Mine, Western Australia; Darlot Mine, Western Australia; Lawlers Mine, Western Australia; and Bulyanhulu Mine, Tanzania. Barrick Gold also has interests in various other properties, such as Round Mountain Mine, Nevada; Hemlo Property, Ontario; Marigold Mine, Nevada; Kalgoorlie Mine, Western Australia; and Kalgoorlie Mine, Western Australia. As of December 31, 2004, it had 89.1 million ounces of total proven and probable gold and mineral reserves. The company was founded in 1983 and is headquartered in Toronto, Canada.

Newmont Mining Corporation (NYSE: NEM) primarily engages in the acquisition, production, and exploration of gold properties. The company has mining operations in the United States, Australia, Peru, Indonesia, Canada, Uzbekistan, Bolivia, New Zealand, Ghana, and Mexico. As of December 31, 2004, Newmont had 92.4 million equity ounces of proven and probable gold reserves and an aggregate land position of approximately 51,500 square miles. The company also engages in silver, copper, and zinc production, as well as in merchant banking operations. Its merchant banking business includes portfolio management, such as providing in-house investment banking and advisory services. Newmont Mining Corporation was founded by William Boyce Thompson in 1921. The company is headquartered in Denver, Colorado.

Bema Gold Corporation (AMEX: BGO) is an intermediate gold producer with mines and development projects in Russia, Chile and South Africa. Bema operates the Julietta Mine in Russia, the Petrex Mines in South Africa, and is 50% owner of the Refugio Mine in Chile, scheduled to recommence production during the third quarter of 2005. By developing its flag ship asset, Kupol in Russia, and continuing to advance the Cerro Casale Project in Chile, Bema is one of the world’s fastest growing gold producers with potential production of one million ounces of gold annually by 2009.

In April 2004, AngloGold Limited and Ashanti Goldfields Limited merged to form AngloGold Ashanti Limited (NYSE: AU), a global gold company with 22 operations on four continents, a substantial project pipeline and an extensive, worldwide exploration program. The new company is listed on the New York, Johannesburg, Ghanaian, London and Australian stock exchanges, as well as the Paris and Brussels bourses.

We’ve searched through dozens of reports and newsletters about gold as a commodity as well as investment in gold-related public companies. And while there is no shortage of opinions on this hot topic, we’ve noticed some pervasive themes that echo again and again. Some of the primary industry touchstones appear to be: Valuation of the U.S. dollar against other currencies, fluctuation of the U.S. trade deficit, the political, social and economic climate in key areas such as China, Japan, Europe and South America. 

A 2003 Bull & Bear Financial Report had these eerily accurate prognostications about the likelihood of a meltdown in the valuation of the U.S. dollar. “What could happen in the U.S.? Conservatively, I think there is at least a 25% possibility that the U.S. dollar could fall at least 75% within the next two years. 

“The risk of a dollar crash and subsequent financial meltdown are not negligible. As the IMF's Rogoff recently commented, ‘The world is set to jump off the top of a waterfall without knowing how deep the water is below.’ By the way, when the value of the currency is falling, inflation is just about guaranteed to take off.” 

Obviously their crystal ball was pretty clear. And the advice they offered still holds true. “The best protection against a collapse in the dollar is to shift out of dollar-denominated assets into those that do not depend on the value of the dollar. Tangible assets have historically been the best protection against currency crises. Among them, gold has traditionally been the asset of choice. It helped many Indonesians in 1997 and may help many Americans in the not-too-distant future.” 

The Bull & Bear report continues, “When even the IMF reports that the dollar is overvalued as it did a couple weeks ago, it is long past time to add to your gold and silver holdings.  “I do not expect it to take long for gold to pass $400. I also think we are still in the early stages of the next bull market. It won't move in a straight line. But the overall trend is definitely up.” Such forecasts seemed shocking at the time but $400 gold seems like a dream now! Still, many analysts feel that the run is far from over. 

Martin Murenbeeld, an analyst for M. Murenbeeld & Associates recently stated that gold price would sustain its current price level, and might even burst through $500/oz during 2006. “There’s a significant probability that gold will average over $500/oz in 2006,” he said.  Murenbeeld’s record on making such bold statements is pretty good too. In 2004 he said gold was most likely to average $435/oz, and that’s very close to what it did. 

The key factors in Murenbeeld’s estimate were: continued dollar weakness, increased gold demand in Asia and from Opec, stable mine supply, and government debt that would lead to monetary reflation. 

Murenbeeld’s structures his gold price estimations in three scenarios. “We are split between a mildly bullish and a more aggressively bullish projection,” said Murenbeeld in notes to his presentation at a forum in Denver. He said he felt that gold would most likely average $470/oz (47% weighting), but could average $565/oz (43%).  “At this point we suggest one ‘plans’ on something around $500 for 2006, but gold could clearly go substantially higher in the event the dollar plunges and monetary reflation comes early,” he said.

In keeping with our own findings, Murenbeeld focused on the U.S. dollar and the Chinese economy noting that U.S. dollar had actually been surprisingly resilient but there were still a number of pressures that could weaken it further including the revaluation of the China currency and the current account balance, which is forecast to significantly rise. The world’s central banks have been supporting the dollar – to stop their own currencies rising – but this support could not continue indefinitely, Murenbeeld said.

“Government debt was likely to increase, which would precipitate inflation, and the printing of more money. Moreover, the coming retirement of the ‘baby boomer’ generation would place unprecedented pressure on government funding. “This is going to cost everyone,” Murenbeeld said. 

He added that gold represented insurance against increasing government debt. “To bring its gold reserves up to 15% presently Opec would have to purchase some 50 million oz, equal to $22.5bn or 350 million barrels of oil. This would not appear to be a hardship now that Opec's foreign exchange reserves exceed $200bn,” Murenbeeld said. 

“Gold is significantly below its average of the last 25 years, when gold prices are converted to today’s currency,” Murenbeeld said. “Gold is not necessarily very expensive once inflation is factored into the picture,” he said.

A recent Newsweek ‘Industry in Focus’ report, spoke with Standard & Poor’s Equity research about the effects of recent gold industry consolidations. S&P sees Gold company shares as fairly valued. However, it says, in the longer term, recent consolidations among gold mining concerns may add a little extra glitter to the industry's prospects. 

On Oct. 31, Barrick Gold (NYSE: ABX ) made an unsolicited offer to acquire Placer Dome (NYSE: PDG ), a move that would continue the industry consolidation of the past few years. (Placer has not yet responded to the offer.) Acquisition activity is usually a bullish sign for the industry, according to S&P.

S&P also indicated that gold may be very near a key support level of $458. Some technicians believe that will be at or near the bottom of the slide that has been under way since the yellow metal hit $483 two months ago. 

Here is an excerpt from S&P’s comments in the Newsweek article: 

Gold occupies a unique position among asset classes because of its dual role as an investment -- chiefly as an inflation hedge -- and as a physical material used in the production of jewelry and certain industrial applications. The recent weakness in gold futures can be attributed to some easing of inflation fears as energy prices subside and central bankers in major industrial nations continue to raise rates to keep inflation at bay. 

While we believe that the group's shares are fairly valued, we continue to have a positive view of the industry's secular prospects. As we see it, the longer-term bullish fundamentals remain firmly intact: 

WIDENING GAP. First, we believe equity markets are less likely to offer as much competition for investment demand as they did in the late 1990s, when double-digit annual rates of return were the norm. While the stock market may have a positive return in 2005, we think financial asset returns in general will be less rewarding than during the 1990s. We believe erratic financial market returns will boost demand for gold and gold stocks. 

Second, we see higher commodity prices in 2005 and 2006, reflecting consolidation in commodity-producing industries and continued global economic growth. The Commodity Research Bureau (CRB) Commodity Price Index rose 23% in 2002, 8.9% in 2003, and 11.2% in 2004. Through October 14, 2005, the CRB Index was up 15.4% year to date. 

Third, we believe the gap between production and consumption of gold should widen as output stagnates and physical demand rises. We believe the low level of gold prices in the late 1990s led to sharply reduced exploration, which we think will result in flat to lower production even if the metal price rises dramatically. 

DRAWING TOGETHER. Fourth, we believe that a cyclical decline in the U.S. dollar that began in mid-2001 will resume some time in early 2006. Also, greater volatility of currencies in general will likely increase the demand for gold. 

Finally, the industry has undergone major consolidation, and the trend appears to remain viable in the wake of the Barrick-Placer news. Barrick acquired Homestake Mining in 2001, and Newmont Mining acquired Australia's Normandy Mining in early 2002. Mergers should, in our view, result in larger market capitalizations and more trading liquidity in the stocks. We believe this will make the group more attractive to institutional investors.

Many other promising Gold Mining companies can be found in the market:

Tonogold Resources, Inc. (Pink Sheets: TNGL) is a gold and silver exploration company with promising properties in Alaska and Nevada. Tonogold Resources is also the parent company of Mesa Uranium, Inc. Tonogold has an experienced, dedicated team of geologists, mining executives, and investment bankers that are building a portfolio of mineral properties including its Nyac Alaska Project, with approximately 57,600 acres. 

Tonogold holds an Exploration and Mining Lease for Nyac with Calista Corporation, the second largest native corporation in Alaska, with land entitlements of more than 6.5 million acres. 

Moreover, with uranium prices up sharply in the last year, some gold companies are adding uranium exploration projects to their portfolio of operations. “With gold hitting record highs and other metals rising precipitously, it has made sense for many gold-centric companies to use their geological expertise to locate uranium,” said SmallCap Sentinel analyst D.R. Clark.

“Uranium prices could skyrocket if power producing entities which rely on uranium begin to hoard the metal,” said SmallCap Sentinel analyst D.R. Clark. “It’s a very small part of their operational expense so they can’t afford not to have it, lending credence to a theory that major companies might begin to make major moves on the metal. Leading metal minds Paul Van Eeden and Dines have echoed similar sentiments with Dines tilting toward the possibility of uranium at $100 a pound.”

“Given the heated world market for uranium, it should come as no surprise that a mining company like Tonogold Resources (Pink Sheets: TNGL) would secure a lease for a lucrative uranium project in New Mexico,” Clark noted. “Tonogold president Jeff Janda has referred to the area where the claims are located, the prolific Grants Uranium District , as a ‘top producer’ ”

NovaGold (AMEX: NG) is a precious metals company focused on the exploration and development of high quality mineral properties in Alaska and Western Canada. NovaGold is rapidly advancing three of North America's largest undeveloped gold and copper deposits: the Galore Creek copper-gold-silver project, the Donlin Creek gold project in partnership with Placer Dome, the Ambler project in partnership with Rio Tinto, as well as the Company's Nome Operations including: Rock Creek, Big Hurrah and Nome Gold. NovaGold has 72.6 million shares outstanding, is well financed with no long-term debt, and has one of the largest resource bases of any exploration or development stage precious metals company. 

Freegold Ventures Limited (OTCBB: FGOVF) is a North American gold exploration company, which is actively exploring and developing advanced stage projects in Idaho (Almaden), the Yukon Territory (Grew Creek) and Alaska (Golden Summit). In addition to its existing projects, the company is active in the identification of additional acquisition opportunities. 

Kinross Gold Corp. (NYSE: KGC) has grown from a junior gold producer to become the seventh largest primary gold producer in the world with approximately 1.6 million ounces of annual gold equivalent production. Kinross has varying interests in 11 operating mines on four continents and a robust pipeline of advanced exploration and development projects. Approximately 50% of our production is in the US and over three-quarters in North America. This largely North American presence provides Kinross with a stable base for our global portfolio of mines. Since completion of the merger with TVX and Echo Bay on January 31, 2003, which vaulted the company into the ranks of the senior producers, Kinross has successfully increased its reserve base from 13.2 million ounces at the end of 2002 to 19.4 at the end of 2004 through exploration and acquisitions.

Vista Gold Corp. (AMEX: VGZ) engages in the evaluation and acquisition of gold projects with defined gold resources. The company holds interests in the Maverick Springs, Mountain View, Hasbrouck, Three Hills, Wildcat projects, and Hycroft mine in Nevada; the Long Valley project in California; the Yellow Pine project in Idaho; the Paredones Amarillos and Guadalupe de los Reyes projects in Mexico; the Amayapampa project in Bolivia; and the Awak Mas project in Indonesia. It also owns five exploration projects in Canada and approximately 25% of the shares of Zamora Gold Corp., a company exploring for gold in Ecuador. The company was incorporated in 1983 and is based in Littleton, Colorado.
 

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