Three Guiana Shield Gold Companies (IAG, GPO, CDE, GUY)

In yesterday's issue, I told you all about an up and coming gold region in the small South American country, Guyana.

*****In short, it's believed that Guyana is the long-lost twin to West African gold deposits - separated by millions of years and thousands of miles of ocean. Once, this region was joined together, but separated when Pangea broke apart.

As I said yesterday, "Early testing indicates that the gold mineralization in Guyana (known as the Guiana shield) strongly resembles the geology of the West African Birimian shield."

It's exciting news, because if the amount of gold found in the Guiana shield is even a half or a quarter as much as similar discoveries in West Africa, the companies operating in this region could skyrocket very quickly.

The opportunity here actually extends beyond just Guyana. Nearby countries Suriname and French Guiana are part of the same Guiana shield and currently have gold exploration companies active within their borders.

We already know there is gold in the Guiana shield, the question is, which companies have the best chance to profit from it?

Today, I'm going to reveal three potential investments to take advantage of the Guiana shield gold boom.

*****Risk is the overriding factor for any junior resource firm - because for many exploration companies, risk is the only sure thing. 

As I said yesterday, "And since these companies typically don't have any kind of earnings, or any history of success, or really any idea about how much gold they'll find, if they'll be able to find it, and whether they'll bring any of it to market, it's basically impossible to value these companies in any normal way."

The flip side of the risk equation, is potential upside. With that said, check out the three companies below.

As always, do your own research and come to your own conclusions on these stocks before taking any action in your portfolio.

*****Two of these companies trade on Canadian exchanges, although they also trade on the pink sheets - I can't recommend buying them on the pink sheets because you might have difficulty buying or selling significant blocks of shares due to lack of volume

So you'll either have to get set up with your full-service broker to buy stocks on Canadian exchanges, or open up a new account with a broker who can access Canadian exchanges.

1). Iamgold Corporation IAG is an $8.2 billion market cap company that pays a 0.4 percent dividend. The company has a 95 percent ownership in the Rosebel Gold Mine in Suriname, South America. In 2009 this open pit mine produced 392,000 ounces at an average cash cost of $396 per ounce, and in 2010 it produced 395,000 ounces at an average cash cost of $499 per ounce.

You can find out more information about Iamgold, and its Rosebel operations through the company's latest investor presentations, available here.

2) Gold Port Resources GPO is a $20 million market cap exploration company. It's drilling on several properties in Guyana, and just recently (on February 14th) closed out the acquisition of a third property - which has the potential to be its biggest find.

From a recent press release: "Metallic screen fire assay analysis by Loring Labs in Georgetown, Guyana of 27 samples Camp Area panel samples returned 50.78 and 38.33 grams gold per tonne over approximately 0.7 meter."

You have to take these press releases with a grain of salt - because they're not official documents. But typically, modern gold mines are considered to be attractive if they have 5 grams per ton of gold, or more.

So if Gold Port has samples showing this type of mineralization, it could be a huge boon.

It's a risk, but the company has also partnered with Coeur d'Alene Mines Corporation CDE, a generally well-respected company in the precious metals mining field - with a good history of bringing projects to profitability.

3) Guyana Gold Fields GUY has a market cap of over $700 million.

This company has a slew of gold projects in different stages of development, with NI-43-101 reports under its belt and a few more coming in 2011. Each of these reports is a potential upside for this company. A large gold mineralization certified by a NI-43-101 could easily double or triple this company in short order.

As I said yesterday, don't bet the farm on any of these stocks. Even a $500 or $100 stake in the second two could give you a substantial return - but don't invest any capital that you would miss. I'd buy these companies in three tranches. Buy your first tranche now, and if the stock starts to run, you can use your own judgment to jump "all-in" in two other purchases.

Kevin McElroy, Editor, Resource Prospector