True believers in Africa-focused gold stocks have had their faith tested in the past 12 months.
Investor Weekly analysis shows shares in the largest Australian gold explorers and producers in Africa have on average fallen by almost a third from their 52-week high.
Former market darlings, such as Ampella Mining, Gryphon Minerals and Azumah Resources, are well down on previous highs, after strong gains in 2009 or 2010.
Long-term, experienced investors may regard this as an opportunity to buy into Africa-focused gold stocks at more realistic valuations.
Short-term investors may take these falls as a potential catalyst for more takeover activity among African exploration companies, which has been a feature of the past year.
Cynics might suggest these share price falls are part of a bigger correction and an unwinding of investment hype over African exploration stocks in 2010.
One thing is certain: African exploration is having a much bigger influence on Australian mining companies and attracting more institutional investors.
The federal goverment last year said more than 220 Australian resources companies had 600 projects across 42 African countries.
They had invested about $20 billion, with billions more ahead. An early focus on gold had spread to other commodities and Australian companies were more active in East Africa.
At least 100 Australian Securities Exchange-listed companies now have their fortunes pinned to Africa, and more are joining them through the initial public offering market.
Reports of strong turnout at the Indaba Mining Conference in South Africa this month, and a large Australian mining contingent in attendance, suggest interest in African exploration is as strong as ever.
That has not translated to recent share price gains.
Gold leader Perseus Mining has fallen from a 52-week high of $4.05 to $2.77 as the market awaits its half-year results and production and cost guidance.
Macquarie Group said in a note this month: "While we think that there is potential downside risk in the near term with the release of the FY12 and FY13 guidance, we remain comfortable with the longer-term outlook for the company."
Its 12-month target for Perseus shares is $4.70.
Ampella Mining has been one of the bigger recent disappointments, with shares falling from a 52-week high of $3.08 to $1.33.
Metallurgical test work this month for its Konkera project resulted in the stock falling by just over 20 per cent. The data raised concerns about the difficulty of processing its ore and associated recovery rates.
Macquarie said: "While the concern is not unfounded, we believe it has been overstated and that at current levels the stock represents significant value."
Macquarie's 12-month Ampella share-price target is $1.90.
Some Africa-focused gold stocks have bucked the trend.
Shares in Resolute Mining, which has the Golden Pride mine in Tanzania, East Africa, and the Syama Mine in Mali, West Africa, rallied from $1.50 in early October to $2.12.
Shares in the smaller Papillon Resources have rallied this year after promising exploration results at its 80 per cent-owned Fekola gold discovery in Mali.
Even so, Africa-focused gold stocks have collectively underperformed other parts of the resource sector in the past 12 months.
The S&P/ASX All Ordinaries Gold Index, for example, is down just 6 per cent over one year to 31 January.
After this period of underperformance, some of the largest Australian gold explorers and producers in Africa may be worthy of further research from experienced speculators who are mindful of high risks in African exploration and the challenges of investing in single-commodity exploration stocks.
Sovereign risk is another huge issue. Investments can be badly damaged when African governments change abruptly, civil war erupts or mining laws change unexpectedly.
A big threat this year is whether civil unrest in North Africa and the Middle East in 2011 spreads to other parts of Africa.
