A Developing Opportunity in Gold

Sean Brodrick

Today I want to introduce you to a U.S.-based exploration and development company that has a fast-growing, multimillion-ounce, advanced-stage precious metals project within the mining-friendly jurisdictions of Nevada.

The gold-and-silver project there is called Sleeper, but don’t be dissuaded by that name. This company also has a project, San Miguel, that’s humming along in northern Mexico.

Earlier this month, I met with the company’s CEO at the world’s largest mining convention, the Prospectors and Developers Association of Canada.

There, Chris Crupi, CEO of Paramount Gold and Silver (PZG on the NYSE-AMEX), was eager to share the company’s newest developments. In a moment, you’ll hear from him directly through the video interview we did together in Toronto.

First, here’s the main reason why I am keeping a close eye on this company …

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Before you sell your gold …

Gold experts from Credit Suisse to Barclays to billionaire investor George Soros say the 12-year bull run for the yellow metal is running out of steam.

With the number of professional traders betting against gold at its highest level since 1999, could 2013 be the year the gold rally finally peaks?

Before the roar of the bears deafens you, consider all the reasons they may be wrong so you don’t sell early … or unnecessarily. Watch this video for all the details …

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The projects are advancing, and the Mexican project is right next to big neighbors — I could see a takeover here.

Plus, PZG is in a lot of gold-mining ETFs, which means it has a lot of institutional support.

I’ll let Chris tell you more about it  …

(Direct link: http://www.youtube.com/watch?v=wTus5eoEZcA)

Some of the highlights from the video …:

* The San Miguel project was recently assessed as having an average grade of 4.5 grams per ton, which is very good. This assessment estimates a 14-year mine life.

*The cap-ex on the San Miguel project (what it will cost to build the mine) is estimated to be $230 million. You should know that, lately, most mining projects are running over their building-cost estimates. Still, that’s not bad.

* Once in operation, San Miguel is expected to produce 57,000 ounces of gold per year, as well as 3 million ounces of silver.

* The company’s other asset — the Sleeper Mine in Nevada — shut down in the mid-‘90s when the price of gold was uneconomic. The indicated resource is 5.5 million ounces of gold in the ground, plus a silver credit.

* The assessment done at Sleeper forecasts a 17-year mine life, with the mine producing 170,000 ounces of gold per year.

* The company has $18 million in cash and equivalents. It will have to raise cash eventually.

With the exception of the fact that Paramount will have to raise money, the fundamentals sound good.

Here are some more metrics on the company worth a second look:

Paramount recently had a market cap of $308.5 million and 147 million shares outstanding.

New drilling at the Sleeper Mine keeps extending the mineralized zone AND has uncovered some “exceptional” gold intercepts.

Finally, the stock has traded from a 52-week high of $2.82 to a 52-week low of $1.89 a share. It’s closer to the low than the high now.

In October, Crupi picked up 1,200 shares at $2.50 apiece in the open market. So you can buy it cheaper than he did.

But SHOULD you buy it?

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This could send gold SOARING …

China is set to launch its first gold ETF in the next few months. With its huge population … and with physical gold imports in China already soaring 94% in 2012 due to demand …

This could be a watershed moment for gold prices. Here’s why …

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Let’s take a look at the chart  …

(Updated chart)

A recent weekly chart shows that PZG is in a downtrend. While it is showing signs of life, if you buy it before it breaks out of the downtrend, you’re trying to catch a falling knife.

What you do in your own portfolio is up to you. I’m not ready to buy yet.

For one thing, Paramount is a gold developer, not a producer. And I think we can still pick up gold and silver producers for dirt-cheap. In fact, I recommended subscribers to my Global Resource Hunter and Red-Hot Global Resources publications do just that recently.

There’s still time to get in on these new trades — grab your risk-free trial membership to Global Resource Hunter today at a steep discount, and you’ll be among the first to receive my newest picks, as soon as I make them!

Still, Paramount Gold and Silver is one to watch. If and when money starts rotating back into developers, I think this stock could take off quickly.

At that time, I may recommend my subscribers buy the stock. If you’re doing this on your own, do your own due diligence and be very careful.

Good luck and good trades,

Sean

P.S. Gold is one investment that most investors own, or want to own. Yet, a major precious-metals news outlet BANNED our latest gold video from its site because it was too controversial. Here’s what their viewers missed … that YOU can use to your advantage!

Sean travels far and wide to seek out small-cap values in the natural resource sector. His journey started in New England. As a youth he worked on Mt. Washington, on the cog railroad that runs to the summit.