by Eric Coffin on Nov 18, 2011

...SmallCapPower.com: Let’s go back to your “Tough Love” article for a moment. You essentially said you’re buying equities on dips in the gold price. Tell our readers about some companies you’ve added during gold price softness.

Eric Coffin: When the gold price moves up, normally you are going to see the first reaction in development level companies, the ones with assets in the ground that people can easily put a value on.For us, that would be a company like Kaminak Gold Corp. (TSX:KAM), which doesn’t yet have a resource but it’s obviously going to have one, and probably not a small one.

Kaminak has had a pretty fair pullback; it’s trading around $3.00. It’s been a slow season for labs and the company still probably has the results from close to 100 drill holes or more in the lab. Every time Kaminak puts out news it’s been good. I’ve got no particular reason to think it’s suddenly going to get terrible so I’d be pretty comfortable with that one.

SmallCapPower.com: When is that resource estimate due?

Eric Coffin: There’s no specific date. Kaminak was talking about getting one out this year. I think they want to have enough drill holes in enough zones to be able to build a substantial number. I don’t know if they can do it that fast with the slow lab turnaround this year however.

SmallCapPower.com: What size do you expect the resource be? Perhaps three million ounces (Moz)?

Eric Coffin: Kinross Gold Inc. (TSX: K) has 1.5 Moz at its White Gold project (formerly held by Underworld Resources) and I’m sure Kaminak is aiming for at least that. It’s a function of how many drill holes they have and the kind of drill hole spacing that the person calculating the resource needs. Kaminak has two or three zones now and probably has a couple more but it needs to get the results from some drill holes to confirm that. Kaminak probably wants a resource in the 1.5-2 Mozrange but that’s only going to be the first number – it’s not going to be the final number.

Another company ..."

http://www.smallcappower.com/articles/if-you-like-volatility-18-11-2011.html