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Start 2011 Off Right - Aultra Gold's in the Investment Sweet Spot

In the trading business there aren't too many things that are certain, but here's one absolute fact - gold is red hot, and it doesn't look like that's going to change anytime soon. The challenge for investors has simply been a lack of ground-floor opportunities. Gold and gold stocks feel a little bit frothy to newcomers, though we've been saying that for six years now and it's yet to be true... they've continued to rise the whole time.

Today, however, we've identified an actual ground-floor opportunity that could let owners reap the full reward of successful gold exploration - Aultra Gold, Inc. (AGDI). A triple digit gain, if not more, is a distinct possibility.

How so? For all intents and purposes, the company itself has effectively materialized in just the last few weeks. Likewise, this stock has just started effectively trading. While the word's not fully out yet about AGDI, as you'll see in a few moments it won't take long for the name to spread and for buyers to make their way in. 

Better still, with all those (now cheap) stimulus dollars injected into the economy finally starting to get some real traction, the inflation that ultimately drives gold upward is just starting to unfurl. I've got a feeling that 2011 isn't going to be much different than the past five years have been, each of which has seen an average of about 37% appreciation in the price of gold. We've seen similar growth in the price of gold mining stocks.

Simply put, I believe Aultra Gold investors are going to doubly benefit from that combination of a 'right time, right place' scenario. That's why you'll want to take action today - before everyone else piles on - if you want to start 2011 with a big bang for your portfolio. 
 

And Off We Go

If you've not heard of Aultra Gold, don't sweat it... it's better known under its operating name Shamika2Gold, and its majority-owned by private outfit Shamika Resources.

Regardless of the name, the key here is what's happened in the last three weeks. Since December 8th, Aultra has signed three major exploration permits, taking the company from the pre-revenue/development stage to a company that's getting much closer to hitting it big in the gold mining business.

Not that it's critical for investors to know the details of these three deals to appreciate the scope of the opportunity, but here's a closer look.

• Five gold-exploration permits in the Democratic Republic of the Congo: This deal gives the company another 830 square kilometers on top of the two Congo explorations already underway.
• Twenty-three exploration licenses (expected to close in Q1 of 2011) in Woburn, Quebec: The areas have been successfully mined before. In fact, two of the largest gold nuggets ever found in Canada came from the Woburn region.
• Gold and ruby exploration licenses in Cambodia: The rights cover 158 square miles, and the area is adjacent to the Pailin ruby gem area. Early analysis suggests there may be as much as 1.5 million ounces of gold there, as well as 9,000 kilograms of rubies.

• Poko Project: 103 square kilometers worth of exploration in the Poko Province in the Congo, in the Kilo-Moto Greenstone belt where there's an abnormally high concentration of gold.
• Lubutu Project: In the Kibara Metallogenic belt, this site consists of sixty-one square kilometers of exploration land in the Congo's Lubutu Province.

As any mining speculator can tell you, fortunes can and do change in an instant. If just one of these projects yields for Aultra, the stock could soar (as in triple-digit potential) in the blink of an eye, doling out huge rewards for those who are in, and simply leaving behind those who aren't in. There just won't be any advance warning when and if gold is struck.

Ergo, the quality of the dig sites is your edge with gold exploration. Good thing Aultra/Shamika now owns rights to three high-quality exploratory mining arenas, even if the rest of the market doesn't quite get that... yet.

Yes, it's still speculative, but that's the point - the risk is high, but the potential reward is equally great.
 

The Charts Says Investors Are Taking Notice

Don't worry about the lack of trading activity with AGDI prior to December 9th; the company was somewhat dormant until then, so the stock was too. However, volume perked up the very day the Congo deal was inked. The unveiling of the next two licensing deals a few days later continued to prod the stock, even though it was contending with a holiday lull.

The key clue from the chart, however, is the potential buying interest here.

A ton of buyers stepped in following the news from early December, largely out of nowhere; Aultra didn't have much of a publicity effort in place at the time, but managed to draw something of a crowd on a mere possibility.

Now, just think of the kind of bullish action that could stem from the one-two punch of serious promotional effort (now that there's a lot to talk about) and a successful exploration even from just one of the sites. Rally city.

Like I said, I don't think a speculative triple-digit gain is out of the question, and volume could swell exponentially. And missing such a move - almost needless to say - would mean loads of regret from those who had a good entry opportunity but just passed it up.
 

Details, Details

There's likely to be another round of financing on the way. Per the company, it should be on the order of $1.5 million to let the company continue to test and explore, and simultaneously let it continue to mine at its current Congo sites. The size of the possible fund-raising is normal for the size and scope of the company's two mining operations and three exploratory efforts. 

It's actually something of a non-event for today's investors, as many junior miners only raise funds as they're needed, and only raise them if there's something worth exploring. Indeed, the fact that Aultra actually was a project worth investing in is a positive sign for today's investors - the fund-raising may well happen at a higher price than today's trading levels. Compared to the current market cap in the $35 million range, it won't even be a blip. 

The sweetest part of all with Aultra Gold, however, is the stock's current trading level. At $0.70 per share, with less than $10,000 you could own 1000 shares of the company, and a pretty sizable piece of a gold and ruby mining operation. The potential payback is many, many times that. 

Take for instance that possible 1.5 million ounces of gold in the ground in Cambodia. At the current price of $1420 per ounce, that site alone could be worth more than $2 billion (yes, with a 'b'). That makes the current market cap with or without the next round of financing a drop in the bucket... and that's just one exploration site.
 

Bottom Line

Speculative? Yeah, AGDI isn't for the faint of heart. On the other hand, nobody ever made a bundle by playing it totally safe 100% of the time. 

The potential for a windfall is certainly in place with Aultra Gold, as we calculated with the Cambodian site's possible value. There are four more sites that could prove comparable. Yet, as we've already seen hints of, the company doesn't even need to strike gold to pay off for the stock's owners. 

As the potential of this story continues to unfold and spread, the stock itself is starting to edge higher. Today's investors have a chance to maximize their return by tapping the initial potential-based rally, and then add to their gains on news of a successful exploration. Anybody who decided to wait may find themselves chasing leftovers.