Continuing “The Case for Gold” series here on Dumbagent, I’ve been researching junior mining companies that could potentially benefit from the rise in gold prices.

Please keep in mind that this is for informational purposes only. Junior gold miners carry with them high risks and are volatile in price movements. These companies are not for speculation.

Esperanza Silver Corporation

http://www.esperanzasilver.com/

Current Stock Price: $1.11

Ticker Symbol: EPZ (Toronto Stock Exchange)

No current production

Despite their name, Esperanza deals both in silver and gold properties. Their two main projects are Cerro Jumil (Mexico, 100% owned), and San Luis (Peru, joint venture with Silver Standard).

The San Luis property contains both gold and silver. One thing to note is that Silver Standard can earn up to an 80% interest in the property if it funds the project to production. The property has received the necessary permits to begin surface drilling and the site and is now in feasibility study. Having only explored 25% of the property, San Luis already contains 265,200 ounces of gold and 7,126,000 ounces of silver measured and indicated resources.

A resource estimate is going to be released in third quarter of 2008 for the Cerro Jumil gold property. This is a heap leach operation that is noteworthy because it is a bulk tonnage gold mine, meaning that even if gold grades are low, the total amount of gold in that area could still be substantial since they are processing mass amounts of rock.

Northgate Minerals

http://www.northgateminerals.com

Current Stock Price: $2.86

Ticker Symbol: NXG (American Stock Exchange)

400,000 ounces of gold expected in 2008

The story of Northgate Minerals has been a roller coaster ride. Their discovery of the Kemess South mine in British Columbia put the company on the map with a bonafide gold and copper mine. The sky seemed the limit for Kenneth Stowe, CEO of the company, who had plans to extend the life of Kemess South beyond 2008 by moving all existing infrastructure and work force over to Kemess North, which housed another 4 million gold ounces in measured and indicated resources. But the mine did not make it past the permitting process as their request was denied by the BC government on the grounds that the mine tailings would be deposited in a nearby lake, which held many social and environmental concerns. To add more insult to injury, they disclosed that $72.6 million of their cash is now locked up in ARS related securities, taking away from further purchasing power that the company needs for further acquisitions.

Despite taking a write-down for Kemess North, Northgate still remained profitable for Q1 2008, posting an EPS of about 20 cents per share due to rising gold prices. As the Kemess South production winds down, they are supplementing the lost production with their acquisition property of the Stawell and Fosterville mines, properties they gained through their buyout of the Australian mining company Perserverance. Stawell and Fosterville gives them a steady production profile until their Young-Davidson (2 million ounces of M&I gold) property comes online. All of their properties are in politically stable areas (Canada and Australia) that have a history of mining the workforce to support operations. 2008 also represents the start of un-hedged gold production. One of the keys for this company will be discovering new deposits in their Australia operations in order to unlock more shareholder value. The Stawell and Fosterville properties have areas around the mining sites that were not drilled, due to Perserverance’s lack of capital to fund additional exploration. Northgate saw this opportunity and immediately put the drills at work with their acquisition, and came up with favorable results.

Tyhee Development Corp

http://www.tyhee.com

Current Stock Price: $0.39 USD

Ticker Symbol: TDC (Toronto Stock Exchange)

No Current Production

Located in the mining friendly area of Yellowknife, Tyhee has already discovered 1.2 million ounces and is expected to increase that number. The Yellowknife district has a past of producing gold as the area, as the town of Yellowknife sprung up as a result of the gold mining companies that were producing back in the 1930’s.

In 2001, the Tyhee made a purchase of the Discovery mine for $250,000. This move has reaped huge dividends as they have uncovered much more than they paid for, giving shareholders a huge return for their investments. Currently, Tyhee has just started drilling at their BigSky property, which is a potential bulk tonnage property with high gold grades. CEO Dave Webb has remarked that they’re aiming to push their resources to a substantial level, comparable to Auerilian Resources. Looking at recent drill results for BigSky shows that this company is in the right area, and if they continue push to production, investors will be rewarded.

http://www.newswire.ca/en/releases/archive/April2008/29/c2491.html

Their recent Clan Lake results have also turned up favorable:

Results from current diamond drill program on Clan Lake Property

Andy has holdings in all three mentioned companies. This is not a recommendation to buy securities. Please do your own due diligence before considering an investment. Since these are junior miners, they carry with them considerably high risks.