As John Embry says you have to be a believer in much higher gold prices since rising gold prices remain the single most important driver for higher gold stocks.

Yes, I know many will argue that the junior problems these days are related to the credit crisis which will wipe out most juniors. A junior not able to finance its ongoing exploration projects will bleed to death.

Although these concerns are justified still many juniors out there are positioned well and have secured their exploration budgets for years to come. Other juniors (producers) don’t have to worry at all since they generate enough cash flow themselves in order to get things moving forward.

So what could change perception then these days? Well, that’s hard to tell, it could be a spark generated by a new world class discovery, it could be record high gold prices, it could be a chain of acquisitions by the major producers.

The bottom line is you’ll be investing in juniors because:

• The industry is not replacing the reserves it is mining every year so majors are forced to acquire juniors because of the need for more reserves
• 75% off all new discoveries are made by juniors
• History says the time to buy is when sentiment hits rock bottom
• Buying juniors in early 2002 has paid off tremendously
• Buying juniors now will be paying off most likely within 12 months from now

As Howard Ruff said "yesterday," "mortgage the farm and the kids!"

RUF