RE: RE: And such is the problem with this boardAs for exploreco's getting between $20 - $300+ dollars for their ouncesin the ground, can you please show me a couple of these said companies?
I would honestly love for you to show me a junior company that is getting more than even $150/oz in the ground.
The average right now is between $120-400 for producers and near termproducers alike, or super high grade deposits with lots of built inspeculation like ATAC, Canaco etc.
The average for juniors is between $20 - $150 on the very high end andone of the best gold discoveries of the past year was bought on thebasis of $125/oz with a large premium as they were being bought out.
Why is GNH on the low end of this spectrum?
Because the companies receiving valuations of $80 - $120 per oz all have3-4 million ounces (They are large deposits that deserve a premium fortheir ounces).
Has GNH proven a large gold deposit? No.
Does GNH have super high grade over medium intervals? No.
Is GNH close to production? No.
So why is GNH not being to be on the low end of the spectrum of explorers?
Personally I would put $50 at the high end as showing a million ouncesis nothing special with million ounce deposits being discovered all overthe place lately.
What is special though is 3-4 million ounce deposits which prove thatnot only has the company found a nice base of gold but their step-outsand further infills in the property are showing that the management teamcan continue to prove up gold and this is not a stand alone deposit butit may extend much further.
Just because I say GBB has 3 million ounces?
Here's my case for GBB:
Resource:
1200 x 500 (fluctuates between 400-700 m) x approximately somewherebetween 150-300 m now, but with the plans to drill down to 450 vertical.Almost every hole is with the drill not vertical into the ground, whichmeans that the hole is shallower than the actual vertical depth. Youalways do this in the early drill campaigns when you drill for structureto get as much facts as possible in the area around the hole.
Gold Bullions Granadas project will be a gigantic low grade open pitmine, with possible high grade areas like the Aukeko (10 grams/tonnepossible). If we got hits from Aukeko, everyone should hold theirbreath, because of the strike over the landscape is becoming enormous.Osisko has 1900 x 300 m x larger depth (350-400 m?), GBB is not far awayas today with similar grades if we drill with RC-drill to determinejust GRADE and not STRUCTURE as with NQ-drilling. The bulk sample wasvery important as the NQ-drilling not determine the nugget effect thatcould be very high for these types of low grade deposits. 1,62grams/tonne in the bulk sample and maybe half than if you take EasternExtension as well.
Grades:
In the bulk sample we got some 1,62 grams/tonne which is actual veryencouraging. If you compare that with the early drill results you seethat they are way lower. Thats the important notice that you need tounderstand. NQ-drilling is not intented to determine grades, especiallynot in low grade deposits like Granada. End of discussion.
Everyone get that the Preliminary block model presents an higheraverage of grades over a higher number of cores than the EasternExtension. That is nothing that worries me, because of the increasingsize of this beast. Grades (notice the word grades now, keepunderstanding so I do not loose everyone here) down to 0,4 is worthtaking to the mill after metallurgy tests in Australia where the GekkoIndustries is located. At these “low” grades, they where able to extractabove 93 percent and al the way up to 97 percent of the gold which isoutstandning! Everything you put into the plant you get in gold bars,this is a very important thing to notice! Not all companies get thesenumbers and loose money in the last step of the process, which meansthat you also loose the most money (have someone seen the series AlaskanGold Rush on Discovery Channel where they loose their money in theprocess plant?).
Drilling:
I think we are going to need some 500.000-1.000.000 meters ofdrilling (maybe 100.000-200.000 meters of NQ and then the boring infilldrilling begins) if we want to determine how big this thing is, whichwill take time. We also have 11.000 hectares of prominent land and wehave only drilled 0,55 percent of this land package. I have seen somepeople in the forum say that we have drilled 5-10 percent, but that isincorrect.
Some estimations:
Low estimate:
1200 x 500 x 150 m = 90 million cubicmeters of ore x 2,5tonne/cubicmeters = 225 million tonnes of ore x 0,5 = 113 million gramsof gold / 31,1 grams/ounce = 3,67 Moz
Average estimate (my own prediction right now):
1200 x 500 x 150 m = 90 million cubicmeters of ore x 2,5tonne/cubicmeters = 225 million tonnes of ore x 0,8 = 180 million gramsof gold / 31,1 grams/ounce = 5,78 Moz
In the resource update in June, I think they will be presentingsome 4-4,5 Moz because of the infill drilling needs to be done, butsomewhere 4-4,5 would be a very good estimate right now.
High estimate:
1200 x 500 x 300 m = 180 million cubicmeters of ore x 2,5tonne/cubicmeters = 450 million tonnes of ore x 0,8 = 360 million gramsof gold / 31,1 grams/ounce = 11,57 Moz
To use 450 m would be to much I think, but if we got hits down there,it would be to deep to open-pit, but partly do underground mining isalso possible.
Money:
Everyone of us is interested in money, we would not be hereelsewhere. Myself is also interested and get all excited when news isaround the corner. But if we see how much the stock price would be if weput some numbers from above into the calculation.
I always round all my numbers downward as you may notice below, as Basa also does.
Low estimate:
3 Moz at 50 dollars/Oz = 150 MCAD
Outstanding shares 166 million
Stock price should not be lower than 90 cents
Average estimate:
4 Moz at 80 dollars/Oz = 320 MCAD
Outstanding shares 166 million
Stock price should not be lower than 1,93 CAD
4,5 Moz at 80 dollars/Oz = 360 MCAD
Outstanding shares 166 million
Stock price should not be lower than 2,17 CAD
High Estimate:
10 Moz at 150 dollars/Oz = 1500 MCAD
Outstanding shares 166 million
Stock price should not be lower than 9,04 CAD
If we get 1 CAD after the month of June is behind us, I will be happybecause of the volatile market right now, but there is much to be donein the stock price until the year of 2011 is over. For example spin-offof Castle Silver Mine, with a large grab sample of almost 200 grams ofsilver per tonne! Look at the Wildcat Silver, First Majestic, SilverWheaton, here we come! Castle Silver Mine and the forthcoming spin-off is valued to 0 CAD above. The rest of the 10940 hectares is valued to 0 CAD.