As Da Rock pointed out last week, Gold was due for a rebound; and Gold did bounce back a little. See the chart following:
However, look at the spectacular rise in my favourite Gold Stock in the chart below, Great Basin Gold, the price has risen 20% from last week's low. What is happening? The market is now pricing in the value of production starting at Great Basin's flagship Burnstone Mine in South Africa. This relatively high grade (5~7g. Au ton) Kimerley Reef mine has 5 million ounces of reserves and close to 20 million ounces of resources. From now to Dec., management is expecting 60,000 to 80,000 of Gold production.
This Burnstone production startup is coupled with their production in their bonanza grade (over 1 oz. Gold/ton) Holister Nevada mine of an estimated 100,000 oz Gold this year.
On top of this, GBG have annouced previously their intention to monetize an ore stockpile from Hollister of about 51,000 tons that contains upto 49,000 oz. of Gold. They expect to receive $26 million initially for this transaction. On June 21st, GBG said that this plan will now go ahead, after their settling a dispute with Queenstake resources.
Altogether, it may be possible for GBG to produce up to 200,000 oz of Gold in 2010.
So, the market is now moving GBG's price forward with all these good tidings, is Santa Claus coming early this year for me?
Disclosure: Long Great Basin Gold - GBG
Disclosure: Long GBG