Accumulate GSS on Pullbacks

Looking for a Gold stock that is really on a roll? Look no further than Golden Star Resources. After frustrating investors for so long during a long period when everything seemed to just go wrong for GSS, it looks like GSS management is finally putting the pieces together.

Even after getting slammed down after the announcement of a secondary offering earlier last week, GSS just roared right back and is trading right around the same price as it had when the offering was first announced 3 days ago. Hard to imagine more bullish action than that. I believe that the current price level (i.e., around $3.90) should be short term resistance, but I would be a buyer on any dip here. My price target for GSS is about $4.90 for the current move.

Here is Tom's latest about the upcoming schedule and prospects for GSS:

"GSS has a steady stream of news and events scheduled between now and June. They aren't planning on giving the manipulators time to put on a raid again. Every one to two weeks something positive is planned to happen:

• Biox #1 commissioned


• Successful offering


• Q4 earnings CC


• St. Jude feasibility study and BOD approval


• Biox #2 commissioned


• Biox in service


• Q1 earnings CC and


• first Biox production numbers


• Power plant in service

Add in a couple more PRs covering exploration, JVs, upgrades, or whatever, and it averages 1 every 10 days.

At this point my only regret is not taking advantage of the pullback to add to my positions. Afraid I was waiting for a lower price like everyone else.

As far as I can tell, the long awaited upmove has already begun, and is rapidly gathering speed and momentum. By Q3 we should have proof that Biox works. If the production and recovery rate meets expectations, Golden Star's stock price may surpass AUY in a year or so."

Very few investors put in as much time and effort into researching a company as much as Tom does and he's been really on the ball about GSS a number of times now.

Tom also subsequently adds the following notes of caution to balance out his positive comments which I posted above:

* We are talking about Ghana...a third world country. They are a democracy, and are making great strides in developing the country and bringing it into the 21st century. Although they are making progress, much work remains to be done.

* I am not an expert on arbitrage. I would think that the arbs would have shorted the stock and planned to buy shares to cover out of the new issuance for a quick profit. For all I know, this may still happen over the next 3 days. It is also possible that some selling may occur after the issuance due to profit taking...I just don't know.

* The size of the offering surprised me, as I saw no need for that much additional cash with Biox on the verge of adding a flood of cash to their coffers. My gut tells me they want to expedite development of a number of projects to add to production and lower costs, but I don't know that for a fact.