Goff Corp. And Golden Star Resources: 2 Gold Miners Oozing Potential

is a U.S.-based public company. Its wholly owned subsidiary, Golden Glory Resources S.A. is engaged in gold exploration with a view to developing highly prospective gold projects. The company is assessing multiple projects for their potential as gold and silver prospects. Colombia is currently one of the leading gold mining areas in the world producing over 55,509 kilograms of gold (2011), primarily from the region where Goff's subsidiary Golden Glory Resources holds leases.

Goff has been aggressively moving to expand its assets by actually carrying out acquisitions and putting language such as the following in its press releases:

“...management is currently evaluating other gold properties in the Caldas region that are under consideration as acquisition targets.”

That language was at the end of a press release the company released on Friday, announcing that its wholly owned subsidiary Golden Glory Resources Inc. reached an agreement to acquire additional leases in the Marmato region, Caldas District, Colombia. The leases, known as the Gavia Properties, are reported to offer multimillion ounce, large tonnage, bulk mineable targets with the potential of up to three grams of gold per ton average.

There was drilling that has been carried out on the property previously. The drilling revealed gold grades averaging about 1 gram per ton with historical data indicating the Gavia Property has gold potential of over 20 million ounces, based on mapping, soil samples and existing tunnels.

Goff Corp took a dive headfirst into the property and on Monday announced that wholly owned subsidiary Golden Glory Resources Inc. is gaining more detailed understanding of its newly acquired leases on the Gavia Gold Project in the Marmato region of Caldas District, Colombia. The review of mining data from ground samples, chip sampling and the tunnels on the Gavia Gold Project support the model that it shows potential as a true “epithermal style” gold project which is a very significant development for shareholders as epithermal style gold projects tend to host the world's largest gold deposits.

The good news on the data could quickly move the project into the lead on Goff’s gold exploration initiatives. Goff Corporation President Warwick Calasse stated:

“If the figures from the detailed technical evaluation and on-ground efforts bear out that this is indeed a potential multi-million ounce gold target (or gold-silver), then we are immediately on a whole new level of gold values that ultimately can end up in the multi-billions of dollars."

You read that correctly, that says “multi-billions” of dollars. That is one of the main reasons why I am excited about the company and its prospects.

That’s not all, the company followed up that news with another release on Tuesday. Goff Corporation reported that its wholly owned subsidiary Golden Glory Resources Inc. obtained previous drilling data on its Gavia Gold Project in Marmato, Colombia, which it is using to determine gold/silver targets on the highly prospective leases. The data, which was gathered from public reports of extensive drilling on the property, indicated the potential for 20 million ounces of contained gold.

The other company I am going to discuss is Golden Star Resources (GSS). The company holds a 90% equity interest in Golden Star (Bogoso/Prestea) Limited and Golden Star (Wassa) Limited, which respectively own the Bogoso/Prestea and Wassa/HBB open-pit gold mines in Ghana. In addition, Golden Star has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as gold exploration interests elsewhere in Ghana, in other parts of West Africa and in Brazil in South America. Golden Star has approximately 259 million shares outstanding.

Late last week, GSS announced its preliminary production results for its Bogoso/Prestea and Wassa/HBB operations for the three month period ended March 31, 2013. In the first quarter of 2013 the company sold a total of 81,358 ounces ("oz") of gold ("Au") at an average realized price of $1,634 per ounce. The production level was a positive development and lifted shares higher by 9%. Sam Coetzer, President and CEO, commented:

"The first quarter production of 81,358 ounces of gold is a very positive accomplishment despite the extended planned maintenance shutdown of the SAG mill at the Bogoso sulfide plant during the quarter which deferred some of our first quarter production into the second quarter. We are on track to meet our production guidance estimate for the year."

Analysts have a price target of about $2 on the shares, which is more than 40% higher than the range at which shares have been trading. Analysts aren’t the only ones suggesting the shares are undervalued.

The most basic valuation multiple is telling a similar story. GSS is trading at a forward P/E multiple of 5. Yes, you read that correctly, that is 5. Gold giant Newmont Mining (NEM) is at a forward P/E multiple of 8 and that is without the growth opportunities and potential a small gold miner like GSS has to offer.

I want to conclude by saying that both Goff and Golden Star are gold miners. Both Goff and Golden Star have an international focus, specifically targeting developing markets. Last but not least, both Goff and Golden Star are undervalued by analysts. The previous points, plus the fact that gold prices are going to continue to move higher as long as the US Fed continues printing money, make both companies--in my opinion--a buy.