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Best Buys in Yukon Gold Stocks

Written By Brian Hicks

Posted February 18, 2011

For the past few weeks, I’ve been urging investors to take a close look at a quality gold exploration companies working in Canada’s Yukon Territory…

But with so many Yukon gold stocks to choose from, it can be difficult for investors to determine which companies deserve the most attention.

And that’s exactly why I put this article together for you today.

For the first time ever, I’ll be publishing some of the guidelines I’ve been personally using to buy Yukon gold stocks.

The very first thing investors should know is that the Yukon gold story is just getting started.

Last year, nearly 80,000 new gold claims were staked in the Yukon. But this represents only 4% of the Yukon’s total land mass.

There is still plenty of staking potential.

In 2011, however, it’s very likely we’ll see several companies make big gold discoveries.

In an average year, only about $20 or $30 million is spent exploring for gold in the Yukon. Now that the price of gold is breaking record highs, about $100 million is spent in an average year.

But in 2011, the Yukon Geological Survey estimates almost $330 million will be spent for work programs and drilling this summer in the Yukon.

With so much exploration going on, someone will no doubt find gold.

Almost 20 million ounces of placer gold have been taken out of the Yukon Territory over the century. The Yukon overall has the biggest placer gold signatures in the world — meaning there are very large sources of gold in the Yukon from whence this gold sprang.

Geologists generally agree that the source of the placer deposits is typically 10 times larger than the amount of placer gold discovered in an area. In the case of the Yukon placer gold numbers, this would mean the gold source could potentially be in excess of 200 million ounces of gold!

We’re talking about billions and billions of dollars here…

The major mining entities are just beginning to wrap their heads around the fact that the Yukon is much more than just an area play; it’s a district play where they can’t afford to not be involved…

For this summer’s exploration season, investors should focus on Yukon gold companies with clearly defined, high priority targets that will be aggressively drilled.

These will be the companies that make the new discoveries this summer and fall, before the cold weather shuts most activities down.

And while no one has a crystal ball to see the future (and a monkey can get lucky), I think we can handicap our odds by asking the seven following questions:

  1. What kind of experience do company executives have? Have they made discoveries in the Yukon before? How much experience do they really have?

  2. Does the project or projects have any past work, or are they virgin properties? What kind of work has been done in the past and how much? Does the project have the right host rocks on the property of interest?

  3. Are geological structures of sufficient size located on the project or projects? Size matters.

  4. Does the company have any drill ready targets for this summer, or are they concentrating on doing work programs this summer to determine drill ready targets? This is very important.

  5. Does the company have any other projects located elsewhere around the world where consistent news flow is not interrupted?

  6. Who are the people who have already been successful in the area? Names like Shawn Ryan and Bob Cathro (also known as Mr. Yukon) are the big boys who have the most knowledge of the area. What are the companies or projects they are associated with?

  7. What juniors have the kind of projects that will interest a major in this particular area if a discovery where to be made?

In addition to the above, I have taken into account how much money the company currently has in the treasury, and whether they have a good share structure or not…

Can the company easily raise money if needed in good times or bad? Do they know how to market their message?

I like stocks that still have a low market cap and give us the chance for some explosive upside potential if things work out.

For investors, the new Yukon gold rush will provide a series of great opportunities for new major discoveries and fortunes to be made in the years to come.

Wise investors who take positions now in the right Yukon gold stocks will be poised to benefit the most as the story unfolds over the course of the next several years.

Good Investing,

Greg McCoach
Analyst, Wealth Daily
Investment Director, Mining Speculator and Insider Alert