Stocks Digest LLC



Stocks Digest LLC

October 17, 2012 13:01 ET

Gold-Oil Correlation Could Spell Profits For Santo Mining Corp. (SANP)

NEWARK, DELAWARE--(Marketwire - Oct. 17, 2012) - Could oil prices be the catalyst to launching the price of spot gold higher in the coming months? Many leading analysts believe that oil prices could be headed up based on supply vs. demand. A growing world population - and no end in sight to gasoline- and diesel-dependent transportation of food and goods and extraction of raw materials - are being met with diminishing sources of fuel and rates of production.

History points toward a positive correlation between gold and oil prices. The 1970s' oil embargo and turmoil in the Middle East resulted in higher prices and mile-long gas lines, during which time gold skyrocketed. Even the most casual observer can see an echo in the geopolitical climate, with a likely future of rising "black gold" prices in the current day and age. And should that occur, real gold prices should follow accordingly.

Average investors have a difficult time profiting from rising oil prices, however. Companies that explore for, produce or refine oil may or may not benefit from increased prices, particularly since their gross profit margin is only around 2.5% - about a dime a gallon at today's prices.

In contrast, rising gold prices can often mean major profit boons for gold miners. You can see the effect of higher spot prices in firms such as Goldcorp (GG), which is up about 46%, and Newmont Mining (NEM), up more than 20%, since the 2012 summer lows when gold prices dipped to $1,550 an ounce.

A small junior gold exploration firm called Santo Mining Corp. (SANP) is positioning itself to follow the same trajectory, as the price of gold continues to accelerate upwards. In fact, the company's strategy is to exploit the same terrain as Goldcorp in the Dominican Republic. Santo Mining has now secured six claims in and around the region where Goldcorp is partnering with the world's largest gold producer on the 25.3-million-gold-oz. Pueblo Viejo mine.

In addition to a variety of global factors, both oil and gold prices are reacting to announced "endless" quantitative easing by the U.S. Federal Reserve and the resulting inflationary expectations. Focused on one of the world's most productive gold belts, Santo Mining could be a way for investors to ease the pain of increased prices.

About Santo Mining Corporation

Santo Mining Corporation is an aggressive junior minerals exploration and development company, based in the Dominican Republic. The company is actively acquiring and exploring its properties, which are strategically located in the prolific and highly prospective Hispaniola Gold-Copper Back-Arc area in the Dominican Republic. A detailed description of the Company's activities is available at SantoMining.com.

Further information on the Company and its filings can be found at www.sec.gov.

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