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Keegan (KGN): Lundin's top stock
The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2010: Keegan Resources (ASE: KGN). "Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won’t see the kind of price inflation that characterized the 1970s. "But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities. 
"So if gold is going to lead the pack, what’s the best gold investment? In my opinion, smaller gold exploration and development companies will offer valuable leverage to gold, and one of the best is Keegan Resources. "Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa. "The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years. "Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate. "As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world’s largest gold deposits. "Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces. "And with the company tying up new ground along trend, there’s literally no telling how large this find could grow. "Frankly, I don’t expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself. "The company’s management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production. "Keegan was among the highest of the high flyers during gold’s fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out offers for the company. "While I know of no indications that any offers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations." |
News Flash
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"Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe," forecasts