Sign Up NowThis Month's Tiny Gems - June 2010

Golden Star Resources (GSS)
Great Basin Gold (GBG)
North American Palladium (PAL)




Golden Star Resources (GSS)


Golden Star Resources (AMEX: GSS) is an international gold mining and exploration company that produces gold in the western African nation of Ghana. Through its subsidiaries, the company owns a controlling interest in four significant gold properties in southern Ghana: the Wassa property, the Prestea Underground property, the Bogoso/Prestea property, and the Hwini-Butre and Benso concessions (HBB properties).


The company's mines are ideally situated along the prolific Ashanti Gold Belt in Ghana, so it is no surprise that its gold reserves continue to increase. Golden Star's mineral reserves, net of mining depletion, increased by 450,000 ounces, or 14 percent, in 2009 to 48.4 million tons, grading 2.4 per ton, for contained gold of 3.73 million ounces at year end. The increase was the result of successful exploration efforts, cost reduction and other engineering changes, and gold price rises.


Golden Star sold nearly 410,000 ounces of gold in 2009, an increase of 38.5 percent over the gold sales of 2008. In the fourth quarter of 2009, the company reached the 2 million ounce mark of total gold sold since its founding in 1999. For 2010, Golden Star forecasts production of about 400,000 ounces of gold at a cash operating cost of $585 per ounce. This is very profitable for the company with the price of gold near $1200 per ounce.





Great Basin Gold (GBG)


Great Basin Gold (AMEX: GBG) is a mining company engaged in the development and exploration of gold properties. The company is currently in late-stage development at two projects – the Hollister project and the Burnstone project – in two of the world's most well-known gold producing regions. The Hollister project is located on the Carlin Trend in Nevada while the Burnstone project is located on the Witwatersrand Basin in South Africa.


The company's ambition of becoming a mid-tier gold producer is fast becoming a reality and should be achieved some time in the summer of 2010. Currently, the Hollister project is producing only 80,000 ounces of gold per year, but production is expected to be ramped up soon to 120,000 ounces of gold per year. Production was held back by milling issues but these have since been resolved through the refurbishment of the Esmeralada mill.


Production is expected to start very soon at Great Basin's Burnstone project in South Africa's underexploited South Rand goldfield. Unlike many other South African mines, the gold here is at very shallow depths which makes it cost-effective. It is expected that this project will be producing 80,000 ounces of gold per year which will allow the company to hit its target of 200,000 ounces of gold produced annually.


Between the two projects, Great Basin Gold has access to a total resource base of 19.1 million tons of gold. At capacity, the Hollister and Burnstone mines will be capable of producing 374,000 ounces of gold per year. This will generate considerable cash flow which will allow the company to fund further exploration efforts, particularly in Africa.



North American Palladium (PAL)


North American Palladium (AMEX: PAL) is a Canadian precious metal company focused on growing its production of palladium and gold in mining-friendly countries. The company, along with Stillwater Mining, is one of only two primary palladium producers in the world.


North American Palladium recently announced that it had restarted production at its flagship Lac des Iles mine in northwestern Ontario. This mine, which produced palladium since 1993, was shuttered in October 2008. Ore production from the Roby Underground zone at the Lac des Iles mine is expected to have increased on May 1 from 2,000 tons per day to 2,600 tons per day. In total, North American Palladium is expected to produce 140,000 ounces of palladium per year.


North American Palladium re-opened its huge palladium mine due to a sharp increase in the price of palladium this year. At current prices, the company will be able mine its palladium at a very nice profit. The price of palladium has moved up this year due to several factors.


On the demand side, there has been increasing demand for palladium (used in catalytic converters) from automakers globally. The demand for palladium has been especially strong in China where auto sales have been setting new records (for China) month after month. There has been increasing investment demand for palladium as well. Exchange traded funds, such as ETFS Physical Palladium Shares, which are backed by actual palladium, are popping up globally.


On the supply side, production of palladium – which is often produced as a by-product of nickel mining – has fallen. Problems at South African mines along with cutbacks at Russia's Norilsk Nickel have curtailed palladium supplies greatly.


North American Palladium also owns and operates the Sleeping Giant gold mine which is located in the prolific Abitibi region of Quebec. The mine produced over 1 million ounces of gold before being put on care and maintenance in 2008 by IAMGOLD.