Gammon owns the Ocampo Mine in Mexico which, says Johnson, has had an "erratic and troubled history." Based on his recent visit, however, he says it is "likely to become a consistent low-cost producer with a long life ahead." At $6 and change, the stock is at a 20% to 40% discount to peers, depending on the metric used, he says. "Once the turnaround is complete," he notes, "we would expect the stock to move closer to parity with its peers," which suggests a price near $10. He expects the company to earn 30 cents a share this year, and 45 cents next year, compared with the 25 cents posted in 2008.

Great Basin is in the initial phases of production at the very high-grade gold-and-silver Hollister Mine in Nevada, and is also constructing a gold mine in South Africa. "As production ramps up, earnings and cash flow should expand dramatically," says Denbow. The stock, currently quoted at $1.46, is about half as expensive as peers, using Johnson's expected 2011 numbers in all metrics. "While there is significant risk associated with any mine start-up, a 50% discount is, in our view, excessive," says Johnson. He believes the company will swing to a profit of three cents a share this year and 13 cents next year, from a 40-cent loss for 2008.

Among the 42 companies in the fund's portfolio are six real standouts in year-to-date performance. Canadian miner San Gold (SGR.Canada), which is looking for the precious metal in the Rice Lake region of Manitoba, returned 136.7%. Osisko Mining (OSK.Canada) is developing a gold deposit in northeastern Québec, and is up 89.8%. Vancouver-based Minefinders (MFN), which is producing gold in Mexico, has jumped 68.9%. Toronto's Iamgold (IAG), which has a number of gold properties in Africa, has gained 90.2%. Impala Platinum (IMP.South Africa) of Johannesburg, which produces platinum in southern Africa, has risen 51.1%. Then there is Randgold Resources(GOLD) with a number of properties in Mali and other spots in Africa; its shares are up 36.3%. "Unlike last year, when rising production costs for things like oil, steel, chemicals and labor squeezed profit margins, [those costs] have been declining this year, while gold prices, which were weak in 2008, have been rising in 2009," Johnson says. "As a result, gold margins are getting quite wide, and that should drive prices higher for mining stocks."

Among the 42 companies in the fund's portfolio are six real standouts in year-to-date performance. Canadian miner San Gold (SGR.Canada), which is looking for the precious metal in the Rice Lake region of Manitoba, returned 136.7%. Osisko Mining (OSK.Canada) is developing a gold deposit in northeastern Québec, and is up 89.8%. Vancouver-based Minefinders (MFN), which is producing gold in Mexico, has jumped 68.9%. Toronto's Iamgold (IAG), which has a number of gold properties in Africa, has gained 90.2%. Impala Platinum (IMP.South Africa) of Johannesburg, which produces platinum in southern Africa, has risen 51.1%. Then there is Randgold Resources(GOLD) with a number of properties in Mali and other spots in Africa; its shares are up 36.3%. "Unlike last year, when rising production costs for things like oil, steel, chemicals and labor squeezed profit margins, [those costs] have been declining this year, while gold prices, which were weak in 2008, have been rising in 2009," Johnson says. "As a result, gold margins are getting quite wide, and that should drive prices higher for mining stocks."

Among the 42 companies in the fund's portfolio are six real standouts in year-to-date performance. Canadian miner San Gold (SGR.Canada), which is looking for the precious metal in the Rice Lake region of Manitoba, returned 136.7%. Osisko Mining (OSK.Canada) is developing a gold deposit in northeastern Québec, and is up 89.8%. Vancouver-based Minefinders (MFN), which is producing gold in Mexico, has jumped 68.9%. Toronto's Iamgold (IAG), which has a number of gold properties in Africa, has gained 90.2%. Impala Platinum (IMP.South Africa) of Johannesburg, which produces platinum in southern Africa, has risen 51.1%. Then there is Randgold Resources(GOLD) with a number of properties in Mali and other spots in Africa; its shares are up 36.3%. "Unlike last year, when rising production costs for things like oil, steel, chemicals and labor squeezed profit margins, [those costs] have been declining this year, while gold prices, which were weak in 2008, have been rising in 2009," Johnson says. "As a result, gold margins are getting quite wide, and that should drive prices higher for mining stocks."