The yellow brick road in the land of Oz…

For those interested in Aussie gold miners, below is an excerpt from a GS report released today, from the land down under. Take it for what it’s worth(probably very little)…We certainly dabble(long) in miners but do not hold any on this list(no particular reason) …Cheers -1689

Key Take-Outs:

• The US dollar gold price has risen ~35% since February this year; however of the gold equities that we cover only AQG has made returns of a similar nature. Several gold equities have actually dropped in value during this period, which suggests that gold equities may rally towards the end of this year. • Early in the year, gold looked set to fall on the back of a brighter assessment of the recovery in the US. However, the onset of social unrest and political upheaval in firstly Egypt and then Libya had investors looking to the metal as a safe haven. • This has been followed by the continued deterioration of sovereign debt concerns in Europe – largely with Greece, followed by the speculation over the direction of the US economy exacerbated by the downgrade of the country’s credit rating to AA+. These issues, along with the stalled economic recovery have led to ongoing weakness of the US dollar, which directly leads to rises in the gold price as a mechanism of wealth protection.

• Using the estimated gold price being factored into our stocks at the current share prices, SBM and KCN are clearly the best value stocks at ~US$1,000 and US$1,200/oz respectively being factored into perpetuity. • There is also a marked breakdown in the correlation between the gold price and the share price over the last year for NCM, KCN, SBM and OGC.

Investment View:

• Gold is in our preferred commodity exposure list, primarily as a means of wealth protection in these volatile times. We cannot see a speedy resolution to the issues mentioned above, and thus we would expect continued support for gold moving forward.

• Our preferences in the gold space are as follows:

NCM; $38.34; HOLD; Target $48.00  KCN; $7.83; BUY; Target $12.50  SBM; $2.22; BUY; Target $3.80      

 TGZ; $2.17; BUY; Target $4.00  AQG; $11.04; HOLD; Target $12.00      OGC; $2.62; HOLD; Target $3.25

PRU; $3.67; HOLD; Target $3.75

Disclosures of Interest

ALACER GOLD CORP.: AQG: Goldman Sachs and/or its affiliates expect to receive or intend to seek compensation for financial and advisory services in the next 3 months from the company, its parent, or its wholly owned or majority owned subsidiary.

KINGSGATE CONSOLIDATED LIMITED: KCN: Goldman Sachs and/or its affiliates expect to receive or intend to seek compensation for financial and advisory services in the next 3 months from the company, its parent, or its wholly owned or majority owned subsidiary.

NEWCREST MINING LIMITED: NCM: Goldman Sachs and/or its affiliates expect to receive or intend to seek compensation for financial and advisory services in the next 3 months from the company, its parent, or its wholly owned or majority owned subsidiary……….

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