via Safehaven - The Truth On Gold Stocks

If you took the S&P TSX Global Gold Index, and you divided it by gold prices in Canadian dollars, you would get very similar results as the article below, that gold companies never perform against gold prices. However, it must be said that individual gold miners with production and growth performed spectaclularily just the same.

"It is simply a function of geology and numbers. Large companies have an extremely difficult time finding enough deposits and big enough deposits to not only replace reserves but to grow production. It's much easier for a company to grow from 50K oz Au production to 100K oz Au production than it is for a company to go from 2M oz Au production to 4M oz Au production. Throw in political risk, permitting delays, financing issues and execution issues and its understandable why the large companies underperform the metal. This being said, it's important to take all those XAU vs. Gold charts with a grain of salt. Over the long-term, Gold will continue to outperform and that chart will continue to make new lows."

Some other realities you might want to consider is that GBN.V is trading below the average options price, and at the same time, the market cap is below the capex for startup. In the meantime, the company saw a major expansion of operations during the drastic curtailment of production. This is preposterously absurd.

I expect positive results at long last, but that depends exclusively on the board of directors.

Operating Mines

The Operating Mines list from the Province Of Saskatchewan says four mines were in production as of November, 2012. Bingo North bulk open pit bulk sample, very similar to the Alimak Zone open pit bulk sample, was completed at the end of Q2 fiscal 2013, leaving Komis, EP, and Lloyd as operational mines. EP will likely complete its stockpiling phase, leaving Komis and Lloyd as operational mines.

It's plainly obvious EP is being/has been stockpiled, since processing rates should have been much higher and results much better. They only processed below-cut-off-grade material of which there is very limited tonnage. The rest is enough, based on historical information, to run the mill for two years, full tilt.

That will leave one low grade operational source for processing, which is the proposed Golden Heart open pit. We have now entered into Q4, fiscal 2013.

http://www.economy.gov.sk.ca/Operating-Mines

http://www.safehaven.com/article/28736/the-truth-on-gold-stocks-vs-gold

-F6