"Attached is some information about Ausgold, of which Geiger Counter is a 5.1% substantial holder, from some respected small cap analysts. [Ed: Oct 2011 & Nov 2011]

"It is classified as a speculative buy but in Patterson's October 2011 Gold Book, which is too large for me to send, it is in their top three in the buy list of explorers.

"I owned it myself for a time in the heady days of 2010, when the main interest was in the copper ground they held at Doolgunna, next door to the bonanza copper strike by Sandfire Resources (ASX : SFR). We all wanted to know if they and some of the other neighbours could double it up! Sadly not yet, they are still drilling and getting reasonable grades but nothing to write home about yet.

"The daily chart looks frightening but its typical of most Australian small cap miners for 2011. They are the first for everyone to get out of in a selloff but of course they are also the first to get back into when the mood changes and usually have spectacular runs. That is starting to happen now. cf ASX : IVA, TRO, PEN, GRR, GBG, RXM, CTO, STB, ROC, PDN, MGX, AGO, and dozens of others, (they are easy to see in the AS 48 Filter).

"I wondered why it would be a good stock to hold in someone's ISA account or why a company like Geiger Counter would want to be a substantial on the register?

"I think that speculative stocks in Australia these days are not so much a risk from the geology, they've got that down pretty pat, although the grades are always the question. The big risks now are in costs. The increasing cost of labour to develop the mines and the costs of building the infrastructure to get it to port. These are becoming much more difficult. That is why Pattersons has it as a Spec.

'Grade is everything', is the mantra these days and for explorers like Ausgold that will be the question to answer, although the gold grades they have so far are encouraging. They have definitely got good ground but there is still a long way to go before the grades are in and the rails are laid. I expect the substantials like Geiger Counter will be stumping up a fair bit more cash yet.

"Let me know if you need anything else."

David Fuller's view Thank you so much for this detailed response, including the two reports posted above, contributed in the spirit of Empowerment Through Knowledge. A number of small to medium-cap miners have seen sharp rallies recently, as you point out. I was interested to see that these now include rare earths producer Lynas (weekly & daily) today on speculation that its politically controversial refinery in Malaysia may soon be licensed to commence production. For full disclosure, I have a small position in Lynas in my personal long-term investment portfolio.

If we really are in a cyclical bull market, which few people expect but the technical action increasingly suggests, then I would expect many bombed out mining shares to show some relative strength.