[We often feature the work of our friend and colleague Chuck Cohen, a NYC-based investment consultant who specializes in mining companies. Below, he explains why it is time for those who have been straddling the fence to buy junior gold shares.  He concludes with two specific recommendations that trade over-the-counter for less than $1.]

Rick has asked me to write about gold with a focus on the junior mining companies, so here we go, along with a couple of specific recommendations. I tried to point out the pros and cons of buying the juniors last month, but let me now make a quick refresher. I also suggest that you go back to Rick’s August archives to review my articles on gold and the junior sector.

Advantages of juniors…

— They have been beaten down in price due to the credit squeeze last year.
— They are on very few radars screens — certainly not on the radar of mainstream America, which is still scouring drawers and attics for loose gold jewelry to sell.
— Due to the supply/demand situation, many juniors will be bought by larger companies who need to buy ounces of reserves. Eventually, this will turn into a frenzy.
— In every mania, the smaller stocks eventually perform much better than the larger companies.
— Most importantly, the potential leverage (ounces to market cap), especially as gold really takes off, will be staggering. This is probably the single most important factor in

 considering a specific company.
— Because of their leverage you don’t have to risk as much as you would with the larger companies.

…and some disadvantages

— They are thinly traded, and some have wide spreads between the bid and the ask prices, so you have to be judicious once you have decided to buy one.
— Some hints when buying them.
    a. You should not chase after one has run up, especially on heavy volume.
    b. Beware of one that has been hyped by more than one analyst.
    c. Take advantage of a down opening or a down day and be wary if the stock has gapped up.
— Be patient once you have bought it. In the upcoming gold move, stocks will go much higher than you might think and sometimes stocks that have languished will just take off.
— Spread your risk over several or even more. If one disappoints, it won’t affect you that much. But if one shoots up, you could get a home run and make up for the laggards.
— I would avoid geopolitical risk and stay in North America and friendly African nations.

I urge you to be a student of gold and these unique companies. If you go to their web sites, you can get an excellent education of what the company is doing and what it is expecting. Use “GoldSheetLinks.com” for locating their sites.

Now, two specific recommendations…

Metanor Resources [OTC: MEAOF]

• It is a producer, albeit small (20,000 ounces this year.)
• It is in Quebec, probably the best place to be right now.
• They have been getting excellent results and the exploration future is very high.
• The chart, as James Bond said, is shaping up very nicely.
• They also have some very interesting warrants which expire May 2012 at $1.00. (I own these.) They are available in U.S. dollars unlike many others.

Here’s a weekly chart of Metanor:

Pelangio Exploration [OTC: PGXPF]

Pelangio was responsible for the giant find at Detour Lake. Last year it merged its shares into Detour Lake (DGC) but kept $19 million which they are putting in their very prospective property in Ghana, a very Western and mining friendly nation. This property has the potential to be a monster and the kind I like to take a shot at. Go to their web site and look at their latest and fascinating presentation on that property to see what I mean. Also, read their latest news release dated September 3. The odds are very good that they will hit something huge, and the market cap is low. Very good odds — and that is the best philosophy to have when choosing juniors.

I own this one also. Here’s a weekly chart:

That will do for starters. In the future, I will try to feature one or two juniors each time or just review some of the ones I have already covered. Also, not to be a nag or a self-promoter, but I want to remind you that I do this professionally, and I can help you strategize, place your orders and try to keep you abreast of what is happening. Please consider this. I am user friendly. Chuck   ikiecohen@msn.com.

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