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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

The Dow on Gold’s Terms

Commodities / Gold and Silver 2010 Jun 22, 2010 - 02:16 AM GMT

By: Richard_Mills

Commodities Central banks money printing is out of control. The constant printing of all the world’s currencies is just another way for countries to default on their debt – the repayment of a creditor occurs using a currency whose purchasing power has been reduced. Gold’s price will continue, has to continue, too rise in value against all depreciating paper currencies


For equity investors and speculators alike history shows us, time and again, the greatest leverage to gold’s rising price is owning gold exploration/development junior mining stocks. Will mainstream investors eventually catch on to the fact they need to own gold and to own gold shares?

The Dow on Gold’s terms:
• In 2000 gold made its $260 per ounce low
• January 2000 the Dow was 10,900
• 10,900 / $260 per ounce = 41.9 ounces to buy the Dow
• Today at 10,450 DJII and $1,259 gold 8.3 oz to buy the Dow

This author believes that the first part – investors are catching on to the fact they need to own precious metals – is already happening and that part two, the buying of shares in companies involved in the search for and development of gold projects will not be too far behind.

Alder Resources ALR-TSXv
ALR has just raised $3,875,000 mm through an oversubscribed private placement.

At this time Alder has two projects:

La Montañita Gold Project - located in western Colombia approximately 220 kilometers from the Pacific Coast and 40 km from the city of Medellin.

The Project encompasses approximately 1,000 hectares, including a 30 hectare mineralized mountain that the Company understands has been the subject of artisanal gold mining for over 80 years. Historic mining consisted primarily of underground tunneling that followed high grade sub-vertical structures varying in width from 20 to 60 centimeters. Alder has a National Instrument 43-101-compliant technical report by an independent qualified person. Highlights of the report include NI 43-101-compliant sampling of underground Au veins with grades of up to 186.5 grams per tonne gold, 272 grams per tonne silver and 0.93 per cent copper.

The Company intends to analyze the potential for a bulk tonnage open pit mine at the Project based on an understanding that the high grade veins at the Project appear to be part of a larger stock work, with four prominent fracture orientations within a granodiorite host rock.

Management believes the host rock, scope and mineralization style are comparable to the nearby Gramalote deposit, also located within the same batholith. The Gramalote deposit is held by a joint venture between Anglogold-Ashanti and B2Gold Inc. and hosts a NI 43-101 compliant estimated inferred mineral resource of 74.4 million tonnes at an average grade of 1.00 g/t gold for a total of approximately 2.4 million ounces of gold. The Gramalote property is less than 40 km from the La Montañita Project.

Canadian Creek - optioned From Cariboo Rose Resources (TSX.v – CRB).

The Canadian Creek property is approximately 11,860 acres of prospective gold, copper, and molybdenum mineralization. It is located 50 km southeast of Underworld Resources (TSX.v – UW) White Gold project - Underworld was recently bought by Kinross - and 25km southeast of Kaminak Gold’s Coffee property. These two projects sparked the largest land rush in the Yukon in years and the newly recognized area has been named the White Gold District.

Alder spent enough money in 2009 to meet its funding commitments for 2010.

Conclusion

Declining confidence in government, markets and paper money is pushing gold toward a front and center mainstream media position.

"The gold story has been around for millennia, but is now attracting investment for thoroughly modern reasons. This month, we advance the thesis that none of the three major tradable currencies will regain its role as a prized store of value. Gold is moving from the shadows, where economists and politicians had consigned it, to center stage.” Don Coxe, founder Coxe Advisors

Gold junior companies reporting good to great results regarding project acquisitions, sampling results and drill assays and having experienced management with tightly held, low, outstanding share counts should do well for their investors.

Alder Resources is a relatively unknown but high potential junior currently focused on gold in Colombia. In this author’s opinion it should be on every investors radar screen.

Is it on yours?

By Richard (Rick) Mills

www.aheadoftheherd.com

rick@aheadoftheherd.com

Copyright © 2010 Richard (Rick) Mills - All Rights Reserved

Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.


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