Gold Stocks Steady, Gold Rises to $1,644

GOLD STOCKS NEWS Gold stocks in Canada were mixed on Monday as the S&P/TSX
Global Gold Index inched higher by 0.02% to 380.72 in afternoon trading. Gold
stocks in the U.S did not trade on Monday, as the equity markets were closed for
the Dr. Martin Luther King Jr. holiday. As such, the Market Vectors Gold Miners
ETF (GDX) the worlds largest gold stocks ETF remained at Fridays closing level
of $54.05 per share. The stability in Canadian gold stocks came as gold futures
rose $13.50, or 0.8%, to $1,644.30 per ounce. The gold stocks sector is coming
off its first stretch of consecutive weekly gains since early November, as the
GDX has climbed 5.1% thus far in 2012. The rebound in gold stocks followed a
particularly disappointing year, however, for the GDX. Despite a 10.1% gain in
the spot price of gold in 2011 its 11th straight annual gain the gold stocks
ETF tumbled 16.6% amid broad-based liquidation in precious metals equities. The
vast majority of large-cap gold stocks which are the principal components of
the GDX have been unable to provide investors with the gold price leverage
exhibited during prior gold bull markets. Two of the most noteworthy examples of
this underperformance have been Canadian-based miners Agnico-Eagle Mines (AEM)
and Barrick Gold (ABX). In 2011, shares of AEM and ABX dropped 52.1% and 14.0%,
respectively. Even Goldcorp (GG) one of the best performing large-cap gold
stocks last year fell 2.9%. In contrast to their larger peers, many small- and
mid-cap gold stocks have provided investors with enhanced gold price leverage
during previous bull markets in gold. One key reason for this trend has been the
superior growth potential of many gold exploration and development companies.
One emerging gold Company focused on generating signficant growth is West
Kirkland Mining (WKM.TSX), which has considerable mineral rights positions in
the Kirkland Lake area of Ontario, Canada and in North Eastern Nevada. This
morning, West Kirkland reported a drilling update on its Cunningham property in
Kirkland Lake, Ontario. The Company noted that it drilled an additional 18 holes
representing 3,345.5 meters on the Cunningham property, and ten holes had
intercepts greater than one gram-meter. Furthermore, the intercepts confirm a
three dimensional gold bearing target in classic Kirkland Lake style where
further drilling will be implemented to map the best grade-thickness. Highlights
of the results included intercepts of 7.85 grams per tonne (g/t) of gold over
0.80 meters in Hole KC1184, 20.10 g/t over 1.00 meters in Hole KC1186, 17.80
meters of 1.25 g/t Au in Hole KC1187, and 2.00 meters grading 3.69 g/t Au in
Hole KC1194. The Company noted that based on the encouraging results, it intends
to drill approximately 15,000 meters of core on its Kirkland Lake properties in
2012. Due in part to the progress it has made since going public in 2010, West
Kirkland has garnered attention from a myriad of institutional investors seeking
leverage to the gold price from small-cap companies in the sector. Notable firms
have acquired considerable stakes in WKM.TSXV include Front Street Investment
Management, RBC Asset Management, and The K2 Principal Fund. In Monday afternoon
trading, two of the best performing large-cap gold stocks in Canada included
AuRico Gold (AUQ.TSX) and Kinross Gold. AUQ.TSX climbed 2.4% to C$8.98 per share
and K.TSX rose 1.9% to C$13.15 per share.