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Resource Capital Research [RCR] - Equity Research Report: Junior and Mid Tier Gold Companies



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Resource Capital Research [RCR] - Equity Research Report: Junior and Mid Tier Gold Companies

Resource Capital Research (�RCR�), an equity research company which focuses on small and mid size resource companies, today launched its major quarterly research report covering 17 gold exploration and development companies.



Key Points

Gold Market:
� In the post GFC environment, gold has been the standout performer.
� In the last twelve months, gold has risen by 31%, recently breaching the US$1,300/ounce level.

Silver has soared 34% in the 12 month period.
� Gold has benefitted from being a unique �safe haven� in a period of universal mistrust of other major asset classes, including equities and bonds.
� Gold�s rises have been driven almost solely by safe haven investment demand.
� With the US dollar under renewed pressure, gold should continue its upwards momentum� we forecast US$1,325/oz for the remainder of calendar 2010.
� Without on-going investment demand, gold�s fundamentals are not strong.
� Gold could continue to gain into the first half of 2011, but at some stage confidence will come back into equity markets, a new bull market will be signaled, and gold could head back towards US$1,000/ounce.

Predicting when is the hard bit!

Gold Equities:
� Gold shares have strongly outperformed most other equity market sectors.
� In the past 12 months, Australian and Canadian gold indices out-performed physical gold, but the South African gold stocks have underperformed.
� The Australian gold sector has been the star in the last six months� rising by 38% with the Australian gold price only up by 11%.

In the last 3 months the Australian gold index is up by 16% despite the A$ gold price actually falling due the strong A$.
� Aussie golds have been boosted by the removal of the mining tax, great exploration success, particularly in West Africa, and takeover activity highlighting value.


Analyst�s Comment � Gold Price Outlook:

�It�s not easy predicting the gold price when it is regularly breaching all-time highs, driven by crisisrelated fear,� says RCR Senior Gold Analyst Dr Tony Parry.



�But who would bet against it right now when the markets don�t have much trust in any other asset class? We expect further recordbreaking gains through into the first half of 2011.

However, if, and when, equity markets enter the next bull phase, (and that�s a big �if�), the need for a safe haven will dissipate and gold will come off.

Predicting when that will happen is the hard bit! The most benefit from gold�s glow has been seen with the Australian gold shares, which have soared in the last six months.�

Please find more in the attachment.

RCR also publishes a quarterly Uranium Sector Review, Iron Ore Company Review, and soon to be released Copper Company Review.

To access the free summary of the gold report or to purchase the 78 page comprehensive report, go to www.rcresearch.com.au/reports.

For further information please contact:

Tony Parry, Senior Gold Analyst
+61 (0) 417 965 026


John Wilson, Managing Director
Phone: +61 2 9252 9405



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