ibejack

Eldorado Gold: A Cost-Effective Way to Move into Gold

What you are trying to say is that the numbers are non-43-101 compliant. That is true. But all the drill results are verified by an independent 3rd party. In Goro's case it's ALchemix (Canada) who has contracts with plenty of well known miners. The Reids use a polgonal estimate which is a method employed by many of the big modern companies.

It's also been validated by Tocqueville's multi-million dollar invest in GORO as well as Hochschild Mining ltd. Both companies had their own team of geologists look at the numbers and property and subsequently bought big. I think Tocqueville owns 13% of GORO and Hochschild owns 24%. Not bad validation for a company that you implied as having SEC problems lol. Numerous other funds hold large stakes in the company as well but I have no proof that they had their geologists on site and checked the numbers.

If a start up mining company wants to go the 43-101 route then it's going to cost you about 8 years and 100 million shares and plenty of warrents to our banking friends :). Most start ups are forced to go this route because it's impossible to raise the money. The Reids however are very well known in mining circles as they operated US GOLD for some 30 years and are known in the mining circles. They were able to raise the money privately. So they will drill up the resource as they go and they are quite confident in the deposit. I believe the immense scope of the project is allready known but legally we cannot speculate until it's all proven. I believe it's going to be the most impressive junior miner seen in the last 10-15 years. Their last drill return was 904 grams gold over 2.5 meters. More of that and GORO will not be GORO much longer..a likely buyout.

So in conclusion I'll take Tocqueville, Hochschild, and the Reids 30 plus years on the mining scene over some blogger...your opinion may vary

Is Gold Resource Corp the next Agnico-Eagle?

I just recently discovered GORO and this looks as you stated, "the next big thing".

Still pretty undiscovered at this point but I wouldn't be surprised to see this rocket to ridiculous highs over the first 3 or 4 quarters before it comes back to reality (somewhere in the 20-30 range). If they hit those #'s then they will be published more and more and gather the folks late to the party that feel like they must own the stock. Those run ups can be exciting and not based in any kind of fundamentals which is why I could easily see this go to 50 before coming back to reality.

Eldorado Gold: A Cost-Effective Way to Move into Gold

If you guys are obsessed with cash cost you check out Gold Resource Corp. This is what extreme high grade gold/silver can do for you. Will be in production this quarter with projected cash cost at 0 dollars, and in years 2 and 3 at negative. Here's how the do it:

Here's the latest metal prices:

Gold = $1,048
Silver = $17.67
Copper = $2.82
Lead = $1.01
Zinc = $0.92 (up sharply just recently)

3 meter mining width metal content for La Arista and Baja veins:

Gold = 6.45g/tonne
Silver = 578g/tonne
Copper = 0.54% = 11.90 lbs/tonne
Lead = 1.79% = 39.45 lbs/tonne
Zinc = 6.67% = 147.01 lbs/tonne

Amount of recoverable metal:

Gold = 6.45g X 0.94 = 6.06g/tonne
Silver = 578g X 0.90 = 520g/tonne
Copper = 11.90 lbs X 0.90 = 10.71 lbs.
Lead = 39.45 lbs X 0.90 = 35.50 lbs.
Zinc = 147.01 lbs. X 0.90 = 132.31 lbs.

Dollar value per tonne of recoverable metal at today's spot price:

Gold = 6.06 / 31.1 X $1,048 = $204.20
Silver = 520 / 31.1 X $17.67 = $295.45
Copper = 10.71 X $2.82 = $30.20
lead = 35.50 X $1.01 = $35.86
Zinc = 132.31 X $0.92 = $121.73

Total value of recoverable metal = $687.44 / tonne

Percent of total represented by precious metals = 72.7%

Notice that we have $121.73 of recoverable value in zinc per tonne. Since this metal is in the form of a concentrate, the refiner is likely to pay GRC about 90% of spot price, so let's reduce this further by 10%. So, on average, we wind up with $121.73 X 0.90 = $109.56 worth of zinc for every tonne of La Arista ore that's processed.

Jason, in the latest company presentation, states that it will cost GRC $98 to mine and mill a tonne of underground ore (this seems high to me, but I'll use it). Notice that $98 is well less than the $109.56 that GRC is going to receive for the zinc alone! This means that GRC will produce not only the gold and silver at zero cost, but the copper and lead too! I calculate this will add about $26.7 million a year in profit on just the base metals alone.

The total value of the recoverable precious metal content would be $204.20 + $295.45 = $499.65 per tonne of La Arista ore.

Total annual value of precious metal content = $499.65 X 1,150t/d X 328 = $188,467,980 (this is pure profit because the zinc has paid the cost of processing)

Adding in the profit on the base metals, the total would be $188,467,980 + $26,700,000 = $215,167,980

Assuming 50 million shares (fully diluted) that's about $4.30 per share in free cash flow.

Earnings would be about 2/3 of $4.30 = $2.87 per share.

Dividend would be 1/3 of $4.30 = $1.43 per share

Assuming a PE ratio of 20 (I actually think 20 is conservative) the share price would be $2.87 X 20 = $57 a share

Paul Krugman says California's collapse has him rattled, and wonders if America will follow it into ungovernability. "Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?"

California is the perfect example of the "end game" for John Maynard Keynes economics, whom Krugman follows. So it should come to no surprise that Krugman is just now realizing this.

This week's dollar slide could be a game changer, marking a key moment in the world's economic recovery. The dollar's decline, the first in almost a year, appears independent of broader movements in equity or bond markets, and could be the start of a major nosedive.

Why make the jump to Armageodon scenerio?

All were talking about is inflation and the problems that go with it.

The dolalr is in a long term downtrend and everyone knows it. Buy gold as a hedge.

Jim Sinclair: Gold, Swine Flu, Communal Emails

How can you people talk about tre with a straight face. Let's do some simple math.

In all of TRE's years...

How many properties do they have that have a NI 43-101?
Likely reply "But TRE Is a royalty company, we don't actually drill any property." Fine. Which leads me to my next question...
How many joint ventures has TRE been involved with?
Has TRE ever produced an ounce of gold in all their years?

89 million shares and nothing to show for it. Think about that for a second and ask yourself why you would continue to hold shares in a company like TRE?

8 Reasons ETF Investors Go for the Gold

The Anti-gold crowd hates the fact that they cannot get rid of gold. It has performed beautifully during this most recent crisis. Go ahead and continue to try and convince yourself that gold is irrelevent while the price of gold continues to say the opposite. Fiat currencies come and go, there is but one constant providing a store of value over thousands of years.

Ask the world's most wealthiest families how they have perserved their family wealth and power through the generations. Ask the banks of the world why the hold almost 15% of the worlds gold reserves if it's so irrelevent. The truth is, gold is not back because it never went anywhere. It was a store of value 1000 years ago, today, and it will continue for the next 1000 years.

What's Driving Gold and Gold Stocks: Part 1

One thing gold proved throughout this crisis: It is still the world's number 1 safehaven. That doesn't tell us where the price is going from here but looking back, gold behaved exactly as it should. That's why most people should continue to hold 10-15% in gold and not sale it.

Gold Is a Good Bet, Soros Implies

Your right, gold is not a great investment for return. Gold is insurance, it is protection from goverment inflation and eventual manipulation. Hold about 10-30% in gold, invest the rest in things you can get more consistent return, but DO hold some gold.

New York Times (NYT) sues the Fed and Treasury for their foot-dragging on responding to Freedom of Information Act requests. The paper wants access to records of who Bernanke and Paulson consulted with in creating TARP, and how BlackRock (BLK), Pimco (AZ), Goldman Sachs (GS) and Wellington were chosen to manage parts of the bailout.

Is it realy that hard to find out ?

Let's see, Hank Paulson contacts Hank Paulson jr.

If China fears are crippling the Fed and preventing it from mopping up enough Treasurys to drive mortgage rates down then it's time to get a grip, Ambrose Evans-Pritchard says. "The Obama team should let it be known... that any country playing games with the U.S. bond market in this crisis will be treated as an enemy and pay a crushing price."

Yeah boy, cause America is really in a position to make such threats! lol

Get real

Silver Trust Adds 420 Tonnes to Its Stash

You guys hear that sound? That giant sucking sound?

SIlver is hard as hell to find right now. I can't point to any technical reasoning but judging by the metals scarcity, it feels like Silver is on the brink of explosion. I would much rather own silver over gold right now. Pretty soon the masses will not be able to afford gold so they will turn to Silver.

No Gold Bubble

The uber wealthy generally know the true value of gold and they are smart to allocate the 10-15% of real wealth to these assets.

Indians Are Selling Gold - Is Their Thinking Right?

I wouldn't be following trends from India. Maybe in about 30 years i will look to India for answers but not at this time.

Several Goldman Sachs (GS) partners who leveraged their GS stakes to buy alternative investments are now being forced to borrow money to cover margin calls amid stock declines - putting Goldman in the awkward position of making margin calls on its own partners.

Dang! And it's a shame their other partner in crime, Hank Paulson is no longer availbale as well....Tough times indeed