After the sub-prime meltdown in late summer of this year, analysts are questioning whether the selling has finally stopped. It is in my opinion that the correction has only been a 'bandaid fix'. In the long run, you are looking for big troubles if you try to fix credit issues with issuing more credit. And that is exactly what the United States has been doing.

How will that affect the metals? Many point out that metal prices are under pressure from technical selling, as evidenced by the large number of short positions on the London Metals Exchange. But I am bullish on mining / metal stocks and feel that the fundamentals remain solid, with the markets in deficit and inventories at historically low levels.

Other than a world wide economic downturn, metal prices are expected to remain very strong. As for the equities, many analysts point out that stocks have outperformed the underlying commodities in recent months as investors started to accept the "stronger for longer" pricing. However....the recent sell-off has brought the stocks down from an historically high premium to net asset value of 28% to just 9% (based on forward curve prices).

I have to say that copper equities in particular look enticing, as they have strong balance sheets and growth profiles, and are trading below 6.5 times 2008 earnings as a group, making theme a 30% discount to "fair value.

But what am I buying? In one word....... GOLD.

I believe this metal shelter will propel to at least the $1200.00 level by December 2008. There has been strong fundamental buying of gold from jewelry manufacturers when the price falls to US$700, and gold equities have greatly under-performed bullion this year, and are now trading at a 25% discount to forward curve valuations. The increased demand from China and India are also obvious reasons for the continued growth of Gold.

I like the Majors regarding gold. (Barrick, Gold Corp) for decent, steady increases, but see much more potential in some of the juniors. Namely Kodiak Explorations- KXL:TSX.V
By all measures of the description, Kodiak Explorations has unearthed a massive gold discovery. They have seen exceptional growth recently, however I see this company having the potential to raise share price to levels that are many multiples of todays close. They have a very seasoned, and aggressive management team. They 100% wholly control 3 prolific properties diversified in Gold, Copper/Nickel and Uranium. But, the main interest right now is in their Hercules Property as they continue to discover high grade-near surface gold, and as recent as today, they continue to expand their ownership of property making them the largest land owners in the prolific Beardmore-Geraldton Gold Belt. Their Golden Mile looks like it is suitably named, and is poised to return large gains for shareholders.

I have heard that a host of Majors have been in discussions with the Kodiak brass. I would have to imagine that any suitor making an attempt to buyout this company would have to pay in excess of my $10.00 short term price prediction.

Please ensure you do your own due dilligence when purchasing a stock, and take this as an informative description of the above listed holding. This is meant to be informative, and in no means or ways is an attempt to sway any person or persons from acting one way or another regarding the above listed holding.