Contributed by: Don Winner
By DON WINNER for Panama-Guide.com - Petaquilla is going to announce the production of their first ounce of gold in either late December or early January 2008. When that happens you can expect a nice spike in the stock price, the last of three surges that happen to a gold or mineral stock for a company that's bringing a mine on-line. They already had two earlier boosts, the first when they announced the intent to put the mine into production, and another when they started building their base camp. (more)
Forget About the Environmentalists: They are not going to be able to stop this project, which is protected by an organic law, the "Ley Petaquilla." Take a look at the 5-year gold prices;
Now Over $800 per oz: The mineral deposits in the Petaquilla holdings hit profitability back at around $300 per ounce or so, and at $800 per ounce it's a "no brainer." Now, take a look at this annotated chart of Petaquilla's performance as a stock (PTQMF)
Pit Mines are Ugly: And so is the underside of your SUV. But, there's gold in them there hills, and they are going to have to cut down some trees and dig some holes in order to get at it. The government of Panama will be making 2% of the revenues, and in reality the gold is just a taste of what is to come - wait until they start exploiting the copper. The deposit in Panama could eventually turn out to be the biggest copper deposit in the world. Ugly, but profitable as hell.
Environment vs. Development: Hopefully Panama will create some kind of "Petaquilla Fund" to take the money that's generated from this mining activity and to plow it back into things like infrastructure development in remote areas, as well as social programs and skills training for those living in poverty on the edge of civilization (where the gold is.) They can also use the funds to mitigate the environmental damage caused by the mining activity, and force (or make sure) that Petaquilla follows up on promises to do things right.
Anyway, PTQMF Is Still A "Buy" And it has been for years. I first talked about this stock (and bought some) when it was at .80 cents a share. Now, at $3.20 or so, it's still going to see a nice bounce, then a long run up. My advice, buy and hold.
Copyright 2007 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.