Greetings All,

Discussions on the Kimber and Tyhee boards have brought me to revisit what I feel to be a big element in the big picture for investors in stocks like Kimber and Tyhee: Gold in Ground versus Gold in Hand.

As everyone knows, the price of Gold in Hand (bullion that has been mined and is possessed by someone) has been rising, and, even though there might be corrections along the way, the bull market is intact. Mid to long term it seems safe to say that Gold in Hand will only rise.

At the same time, Gold in Ground (stocks in mining companies) has performed very poorly over the last couple of years, particularly this past fall. Gold in Ground is generally owned through stocks, and these stocks have been trashed along with the general market, regardless of what Gold in Hand is doing. Short term, it is hard to say what these stocks will do, but, mid to long term, one would expect a change in their behaviour at some point due to a change in market psychology.

Presently, market psychology seems to be the following: Gold in Hand is ‘real’ and has no risk, it’s there, in one’s hand. Gold in Ground requires lots of risk involved for it to be turned into Gold in Hand: the integrity of the entire stock market, the financial health/honesty/etc. of the company involved, permitting, mine construction, mine start-up, political considerations, etc. This is understandable in a market filled with fear, but we are expecting things to change, or else we would not be here.

How could this psychology change? Well, in my humble opinion, it could change when a critical mass of investors comes to believe something along these lines:

1) Gold in Hand is one of the safest places for their money but it is getting “expensive”

2) Gold in Hand is one of the safest places for their money but those who can offer future production of it (major/mid-tier producers) are extremely undervalued and are not only safe but will offer a better return than bullion

3) Those who can offer future production of Gold in Hand are extremely undervalued but those who supply producers (successful explorers) are even more undervalued, and they are ultimately safe too, with the right management, location, etc.

When all of these steps have been followed, and investors want in at all levels, really want in at all levels, then we might see stocks like Kimber and Tyhee skyrocket.

As others here have already expressed, our present dilemma is whether to stay with stocks like Kimber and Tyhee or to jump up the food chain, or wait out the market, or simply go with Gold in Hand…

I think there will be winners in all of these areas, and who can say who the biggest winners will be; no one knows, and many things could happen.

In short (and sorry for rambling…), there is a real reason why stocks like Tyhee/Kimber are so low, and why they could possibly go lower again during another market down turn: it’s investors’ heads (psychology) that tell them when to buy or sell, and right now in their heads there is a perception of simply too much risk on the long road between Gold in Ground and Gold in Hand. This incredibly leads to the former being valued at 10 to 20 dollars per ounce, at the very same time the latter goes for nearly 1000 dollars per ounce.

All this just my humble opinion, of course.

Comments, positive criticism, etc. much appreciated….

Stone