GNHI'm not saying there's not gold at Bellechasse, there certainly is and yes I will agree it is better grade than GBB. But GBB also has over 70,000 metres drilled in the past 15 months and has doubled their strike length, their depth and the width of their deposit.
The Hoov Report was what kept many investors clinging to Golden Hope as a geologist much smarter than investors had a very positive bias on GNH and believed that we could be in for a rollercoaster ride of a 2010 if the VG hits were what we thought they might be. The VG for the most part came back blank and the results for the most part were what was expected but certainly nothing special.
I will say right now that I DO believe in the GNH deposit. I believe there will be much better grade at depth to the tune of 2-4 g/t au once you hit 250 metres vertical and I also believe that the 20 km belt has not been disproven but this is not even comparable to the ATAC Resources Rau Belt which some on the Agoracom board have speculated can be compared to GNH. ATAC has double digit grades over 40 - 70 metre intervals and has hit on all targets so far on their belt, proving up a high grade gold belt theory. GNH was speculated to be like an ATAC Resources with the massive amount of targets along their geological belt but unfortunately the assay results received were over small widths and the grades were nothing extraordinary but were nice I will admit.
The problem with GNH right now is how diluted this company is without even a Resource yet.
Yes GBB is more diluted than GNH with 159 M shares out currently and GNH having only 115 M shares outstanding but GBB will also be putting out a 43-101 of over 2.8 million ounces of gold this summer which will allow financing at a much higher price and minimum dilution from here on out.
GNH does not even have a date for an official 43-101 release yet and while a 3D model might be nice it doesn't put a definitive number on ounces in the ground nor does it have the ounces in the ground bankable by 43-101 standards.
Let's say best-case scenario GNH comes out with a resource of 1.3 million ounces this Fall on their T1 and T2 Zones.
The share price may pop back to 35 cents giving GNH a value of $40 + million dollars but that is the absolute most GNH will be getting in terms of a share price boost.
So the share price pops to 35 cents, settles in the 30 cent range and GNH to raise funds to keep drilling (the 2,500 metre drill program will be complete) issues a PP of 30 million shares at 25 cents. This would give them $7.5 million in the bank and quite enough to keep exploring but it would also dilute them to almost 150 M shares oustanding.
As a new investor looking at GNH 6-9 months from now I personally would not be hopping on board a company with 150 M shares out, a 43-101 just released meaning there are no near-term catalysts for the stock as well as only 1.3 million ounces proven. What happens when the $7.5 million is burnt through and GNH needs to finance to contract out their next Resource Estimate? They'll be diluting once again at no better than 35 cents a share and this will continue the dilution in the company.
I'm just trying to provide some facts to a board that seems to have followed the Mighty Hoov into a share price that is an embarassment to say the least. People on the Agoracom board are actually saying they can't understand GNH's share price here as "most junior gold companies are valued between $100 - $200 dollars an ounce valuation on their ounces in the ground.
The average valuation per oz in the ground for juniors is much closer to $55 - $80 dollars per oz and closer to $90 - $110 if the company deserves a premium since they have proven up a deposit with 3 - 4 million ounces - like Richfield Ventures, symbol RVC.
If you can tell me you think GNH proving up a 1 million ounce deposit will be valued at higher than 40 cents share price you're not shopping around and comparing other companies with gold resources currently. Look at Northern Gold Mining in Ontario looking to prove up a 1.8 - 2.0 million ounce deposit in Ontario at their Garcon and Jonpol deposits and already 1 million ounces proven. They are trading at a market capitalization of $50 million and have double the gold GNH has.
And if you believe GNH will be proving up over a 1.5 million ounce deposit then I hope you're assuming the grade is going to come in at 4-5 g/t au cause there is no way in hell the tonnage is there to prove over 1.5 million ounces.
GNH is a great trading stock and is undervalued at these prices I agree but with no near term catalysts and a measly 2,500 metre drill program currently on the property (compared to other juniors with 50,000 - 150,000 metre drill programs currently with record gold prices) I do not think this is a buy and hold in the slightest.