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Gold/Mining/Energy : Golden Star Resources Ltd. - A Potenial Ten Bagger
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To: JG who wrote (19)8/22/1998 8:25:00 PM
From: Dave Gahm   of 44
 
Jim,
I am a patient contrarian, and long ago learned to slowly accumulate positions in out of favor stocks. I am as surprised as anyone that GSR has dropped so low, but I have taken advantage of the situation to more than double my position at the current price.

Have to agree that their exploration project portfolio may not be worth a lot unless we see higher gold prices, which is why I am more curious about the value of the Omai equity stake and it's marketability. Of course, I would not be buying GSR if I did not believe that the POG will be significantly higher long before GSR runs out of cash. But, I have been wrong before, so feel it is prudent to objectively weigh the potential downside. My sense is that the risk-reward ratio is very favorable at this point.

The last time I played golds was 5-6 years ago. I did quite well, but stayed with the majors such as BMG, PDG, HM, and ECO. Currently there seems to be more relative value in the Juniors...and potentially a lot more excitement. I wonder how much of the current negative sentiment towards exploration companies can be traced to the BRE-X fiasco. As far as I can tell, GSR management is conservative and professional, with the shareholder's interest foremost.

Regards, Dave

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