Paramount Gold Mining Corp. (NYSEMKT:PZG)

CAPS Rating: 2 out of 5

A natural resource company engaged in the acquisition, exploration and development of gold, silver and precious metal properties.


Player Avatar branshew (< 20) Submitted: 9/14/2010 10:21:28 PM : Outperform Start Price: $1.48 PZG Score: -120.35

Gold is trending up with new highs as of today. Until the economy stabilizes, people will flock to gold for asset protection. Once the economy rebounds, they will move to gold for inflation protection. Unlike their parents who actually had gold currency in circulation, Baby Boomers seemed to have forgotten that Gold is a real, tangible asset. It's price lingered for decades as a result of their favor for stocks and bonds. The current economic crisis has refreshed the memories of investors so I don't see gold going out of favor again for at least another decade. (how long is our short term memory in the US now anyways?)This is purely a speculative play, but at this price one can afford to do so. At current gold prices, their proven 2.65 M oz. reserves equate to $3.3 B value which would equate to $30/share. (not suggesting that is a proper valuation) I anticipate that they will discover more as they continue to drill on their properties. Keep in mind that these guys are not in the business of running and operating mines. They are an exploration and land holding company that is much more likely a takeover target for another larger company that will actually put the properties into production. It is also possible that they will partner with another producer. At some point, they ae going to have to start producing some revenues.If you can afford to wait it out, there is real upside potential here. Expect a possible additional stock offering to offset some exploration costs. I could see a takeover once their reserves are proven at 3-4 M oz.

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