The Astrologers Fund Triple Gold Conference, held last week at the Princeton Club of New York, attracted a fair number of committed gold bugs. Most of the attendees were pretty smug about gold recently hitting a 25-year high of $572. This group had long been expecting it.

To kick off the session, Henry Weingarten, financial astrologer and conference host, reiterated his warning of a sizable stock market drop – to come in the second quarter, or 60 to 90 days after the full moon expected on March 29. He is projecting that the market will dive below 10,000 on the Dow, and lower than 2,000 on Nasdaq.

Why? He’s not sure, though he has identified no less than 37 possible crises which could hit the markets. His astrological charts apparently stop short of identifying which crises will be responsible for a sell-off. One is tempted to dismiss such forecasts – who really wants to be guided by the vagaries of the planets? – but the uncomfortable truth is that over the years Mr. Weingarten has made a number of predictions that have come true. Either he is pretty good at sizing up economic data (which he also uses),or the stars really do throw their weight around.

The tenor of the meeting was generally negative on the financial state of the union (gold investors are not a very cheerful lot). One speaker argued inflation is being substantially understated by the government, others spoke of trade deficits and the poor future of the dollar.

It goes without saying that these concerns lead to a pretty rosy picture for gold. Mr. Weingarten, who has championed gold as an investment for some time, to his credit, says, “We’re not going to see $400 gold again.” He expects 2006 and 2008 to be especially strong years for gold, but the outlook for 2007 is uncertain. He also has several different price targets. For the record, he thinks the metal is fairly priced today “as a commodity” but because of the 37 looming crises, the metal may take on a reserve currency value premium.

The real lessons of the day, however, were the presentations made by several small gold and silver mining companies. If you are convinced the rises in gold, silver, and other commodity prices are more than temporary, the next step is to look for companies that will benefit. A sign of the times was that Nova Gold (Mr. Weingarten’s personal favorite core holding) was not able to speak at the conference, since it had just announced a $100 million financing.

A number of companies made, in our inexperienced view, convincing cases that their stocks were undervalued. The bottom line is that, just as higher oil prices can improve the outlook for an abandoned field, higher gold prices have renewed exploration activity and made deposits that had been written off economic once more.

A good example is a company called Mine Finders (MFN on the AMEX), which has a market capitalization of about $250 million and is developing a promising mine in Mexico called Dolores. The company boasts an experienced management team and an ability to raise the money needed to develop Dolores ($35 million in cash on the books, no debt). According to management, the stock at $6.91 is selling at a 50% discount to net asset value. Typically, stocks like this increase in value as the mine gets closer to production; construction is set to begin in April.

Though Dolores is said to entail minimal environmental risk, the company must relocate a village before construction can begin. We assume this could get picked up by some interest group and cause delays, and should be counted as a risk.

Another interesting story was told by the management of Minco Mining (MMK on the AMEX), a company operating in China since 1994.The company is tiny, with a market cap of about $65 million and a stock priced below $2. Like most regions, China has not had much exploration in the past 15 years, when gold and silver prices were low. The country is the fourth-largest silver producer; because of growing demand and shrinking supply within China, the country is expected to become a net importer within the next two years. Thus, exploration is heating up. Minco Mining owns 58% of a company called Minco Silver (MSV on the Toronto Exchange), which seems to be the entity that is a strategic partner with yet another company called Silver Standard. Though complicated, the notion of a company investing in an aggressive exploration effort in China appeared reasonable.

Another interesting company is Exeter Resource (XRC on the Toronto Venture Exchange), the largest gold explorer in Argentina. This outfit is in the planning stage with a promising open pit mine, where expected production has just been doubled. The market cap of the company is $46 million Canadian, substantially below others in the industry with similar prospects, according to management. The stock sells below $2; the company is very small.

A company called Aberdeen (AAB on the Toronto Venture Exchange) also presented at the conference. This outfit has an experienced group of technical fellows who are searching in developing countries for royalty opportunities. They are interested in large high-quality resources in areas with moderate political risk, such as the Dominican Republic and Malaysia. The appeal is that they will not be putting capital into projects in these areas, but simply buying participations.

Aberdeen has recently concluded its first royalty deal, a $10 million royalty with a South African public producer called Simmers. According to Aberdeen management, the South African mining industry has historically been mismanaged, and is short of capital. The transaction gives the company considerable leverage to raise gold prices. Given management’s projection of cash flow, the stock appears undervalued compared to comparable companies.

Though all these companies, and others on the program, are small and carry the risks attendant to being new and untested, the stories were interesting. It has to be said that a major reversal in gold prices might wipe some of these companies off the map. One approach would be for an investor, after checking out these managements thoroughly, to buy a basket of small exploration companies, recognizing that these are speculative issues. If indeed the gold cycle has just begun, the rewards could be substantial.