GLOBAL MINERALS LTD NEW GMFLF

ore grades and market cap

[coach247]

I do not believe there is any direct relationship between ore grades and the market cap for a junior mining company. High grade assays tend to attract attention from retail investors, and perhaps generate some buying, but overall it is the resources of a project and the expected cash flow that can be generated from operations that will drive the market cap. So to suggest "if a reported grade is true, then the market cap should be XXX" is not particularly useful information. Right now CTG has work to do, to prove to the market that they will be able to run the mine and generate a profit. They have yet to finalize a decision on whether to ship concentrates to a contract smelter, or to invest in a process to further refine the gold and silver production in-house. They have yet to achieve commercial production at the design capacity of the mill. They have significant exploration and development work ahead to increase the mineral inventory and put some kind of production stability in place, even though it is unlikely that the company will ever prove up a large reserve. All of the above issues are factors that would warrant the market to discount the value of the company at this time. As CTG moves forward to address these considerations, the stock will move higher. I think it is that simple. The right time to buy a junior is at the point of maximum pessimism. That point has already passed. However, for the more conservative investors, the right time to buy is when the uncertainties that affect the future performance of the company begin to be resolved. That point is coming in the weeks and months ahead. All juniors are risky. There will always be some potential problem that could arise and impact on the performance, no matter how carefully one researches the story. I own CTG because I think the upside potential justifies taking on that risk, and I expect the market will begin to bid the stock up as the company demonstrates they can make the mine work. High gold and silver grades are nice, but if they can generate a profit running the run of mill ore from daily operations, then I am a happy investor. cheers! COACH247