In A Box Under Wraps

This is basically my feeling about GBN.V as a whole, you will not get timely news and must rely solely on market fundamentals for price action in the shares. But once in production, not much can be kept under wraps any longer, as the cat is finally out of the bag.

Parsing company comments about the productivity of the Roy Lloyd mine, and the available grades in the ore stockpiles, the following result can be obtained:

350 tpd high grade material @14g/t

+

50 tpd low grade @ 5g/t

gives you a ~60,000 oz./yr operation.

We don't know the mix once the mill is upgraded next summer, or what the projected grade will be once other mines have come on stream later in the production schedule. Should be very similar as Roy Lloyd is the bread and butter. (it should be noted that a 14g/t mine is not chickenfeed. 14g/t is an exceedingly robust producing gold mine.)

I assume that the interval between October and December did not see arctic conditions with the miners having to fend off the polar bears with their bare hands, and that these grades are pretty much what to expect going forward for Q1 + Q2.

Bear in mind that the jewel in the crown, the mill zone, is being totally neglected at this point.

In the short term, I am still expecting a re-test of the downside risk in the shares, as our sell-side brokers will find it just too tempting and continue to lay on sell-side risk by first selling shares they do not own and run up an amazing tab. But this pre-disposes GBN.V shares to a major melt-up as we saw in November, as the discount rate is due to decline, the gold price is set to rally, and GBN.V shares are probably going to follow on the volatility index. As you can see, news releases have only very minor impact.

If you are going to make $90m. per year(based on $1500/oz. average), then paying a dividend to the tune of 1¢ per share per month should be feasible without impairing the organic growth of the project and giving a lot of developmental/operational leeway.

Anything else is just rotten nonsense.

supersize: http://www.flickr.com/photos/11747277@N07/5288500562/sizes/l/in/photostream/

stockcharts.com

Why Gold Shares, Why Now?

Basically the it-market was the housing bubble in Canada, but people are beginning to see the impossibility of profitting any longer from price squeezes and speculative price fixing, so they will turn to other markets with a prospect of growth.

The S&P Capped Real Estate Index may be providing us with a indication of where we are, exactly that a top is already implied.

stockcharts.com

Adrian Ash comments

"2010 MARKED a step-change for the bull market in gold, says Adrian Ash, head of research at gold trading and ownership service BullionVault – a switch to steadier growth in investment demand, rather than short-term crisis buying, fed by a broadening awareness of just how deep and long-lived fiscal deficits have become.

Most people rightly think of Gold Bullion as an inflation hedge. But it's only now, ten years into this bull market, that this "old normal" so clearly applies. After the interlude of the banking crisis – when debt-free gold, as an alternative to savings accounts, offered an immediate haven – gold has reverted to its more historic role: a refuge from excessive government debts, and from the currency crises they threaten to spawn.

Below are the four ways this will impact fresh Gold Investment demand in 2011:"

http://goldnews.bullionvault.com/gold_investment_2011_122120103

Gruesome, Pallid, Constipated Top-Calling Contortionists

BNN.CA

And they say a bell never rings when to get into or out of a market

http://watch.bnn.ca/business-day/december-2010/business-day-december-21-2010/#clip392258

Mainstream Has Absolutely Nothing To Add

http://watch.bnn.ca/thursday#clip392658

-F6