best gold stock in 12 mths time?

  1. 9,081 Posts.
    Now this post should elicit some responses. I am talking about a percentage rise in stock price from this point in time to, say Dec. 31st 2004.

    My pick is EMP ... Emperor Gold Mines.

    It is currently a high cost / large resource gold producer and has consistently bounced off the long term tested support level of around 52c.

    It is currently trading in a consolidation range of 54c - 58c. A break out above 60c will be positive for EMP but its uptrend will really get underway once it closes above 84/5c

    So why EMP?

    Two premises underpin my positive view of this stock:

    1. We are in a long term secular bull market for gold. In such an environment EMP is highly leveraged to the gold price. Paterson Ord Minett estimate that every $10 (US) move in the gold price changes EMP's valuation by around 12c a share.

    2, EMP's Phase 2 long term operating expansion strategy at its 100% Vatukoula mine is currently underway and aims at increasing gold production by 35% to 180,000 oz. This should eventuate by mid 2005.

    It is this expansion that will also achieve lower costs by spreading EMP's relatively high fixed cost base over a broader production profile.

    Already the ageing underground mine fleet is being replaced, mine infrastructure is being improved, more working faces are being opened up at the Vatukoula mine and there are improvements to the cooling / ventillation system.

    I believe the worst is now behind EMP - its last quarterly report was a shocker but dramatic improvement is on the cards.

    In the current long term bull market in gold, EMP will arise like a golden phoenix from the ashes of its former life.
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.