Tweedle1StyleThank you for your article about Gold Ridge being possibly as large as Ok-Tedi in Papua New Guinea as I never saw this article before Tweedle1Style.
I am not sure where they got their information from, but it is encouraging to say the least. At any rate it is always refreshing to have a newer shareholder posting here even if he just wants to discuss this stock and not have any new information to provide.
I can't remember off hand how much gold they have at Ok-Tedi but I do know they pumped out over 7M oz of Au since they started mining there in 2001 until 2004, and I believe the mine still had a life of 10 years back then. So if I were to guess, by 2014 they would produce somewhere around 20M oz of Au, at least. Perhaps 25M ounces!
We can't say with confidence yet that we will find 20M oz of Au at Gold Ridge, but what we can say is that our Mining Lease, with these four pits and the gorge, is only a small fraction of our total exploration lease, and in which most of this property has never seen a drill bit on, or had any modern testing done. So this surely leaves the door wide open for further huge discoveries there. I suspect that SGA bought Gold Ridge based on this, more so then the proven reserves.
I do know what you mean about lack of discussion from Robert Cohen, about SGA's potential, and recent discoveries of gold in the Gorge, but I think there is a good reason for that, besides him possibly wanting to buy more cheap SGA shares.
To be honest Tweedle1Style, 18 month ago, and with news like this discovery, this stock would have easily doubled. But today this news goes unnoticed, and worst yet, when Retail Investors don't see the stock jump, they panic and sell out, and actually lower this share price on such good news. It has happened with SGA before.
A good case in point is one of our major shareholders, Golden China Resources. In September, 2006 after further drilling, they announced an updated NR 43-101 Compliant Independent Mineral Resource Estimate increase, at its Nibao Property, and their only known gold resources then, that they increased the previous known total resources there by over 88%. Now anyone would think they would get a nice bump up in share price after this great news, wouldn't you? If it happened a year earlier you would almost be guaranteed this stock price would soar or even double.
What happen in reality though, is this stock basically did nothing and this news went totally unnoticed by the investors as even the volume remained low after this news. What made matters worst was when there was no positive price action, people began to sell out and the stock dropped by over 20% a month later.
So I do not have much faith in improved drill results at the moment, as I think it will take a lot more than this to get the big guys back on board with junior gold mining stocks again. I am sure many got burnt on this stocks after May 2006, and once burnt twice shy.
In fact this whole gold price volatility and recent history seems like a big farce to me sometimes. As soon as we get close to $700 some bank dumps another 250 tonnes of gold on the market. All the Central Banks confirm that gold is money, but who sells money, besides a coin collector, and them?
I often thought that the Big Gold Miners should take a harder stance with these type of actions. They are enjoying record profits right now, although cost are on the rise. Why don't the top 10 or 20 get together and form their own Cartel? Then say to the banks that if you want to dump another 250 tonnes of gold on the market, then we will hold back 250 tonnes from our sales.
I do think however that these big guys are mixing more of their leaner gold with their richer gold, and this is why the total production of gold has come down these past years, so this does help a bit, and I guess their way of protesting. They are also clearing their Gold Hedges, which has also helped the market, but how can you farley compete with the Central Banks, or the USA, when they hold at least a full 10 year supply of gold in their vaults? Or at least that is rumored they do anyway.
And then their is this unexplained China Syndrome. Here you have an ancient civilization who through all these centuries has been the greatest lovers of gold, and yet their Chinese Government, with a wallet packed full of foreign new items, which is over a Trillion US Dollars, is one of the lowest holders of gold in their reserves compared to any other country there. Korea holds more gold then China. Does that make any sense to you, as it sure doesn't to me?
I think what we need more than anything else, isn't an slight increase in our gold reserves, although a significant increase wouldn't hurt. What we need is a clear direction in which way gold is headed the next few years. There is an old saying, I am sure you all heard before that says "Markets Loath Uncertainty".
I believe this applies to the Price of Gold right now, and since last May. They don't want to invest in a gold mining stocks, especially juniors farther away from production, and no matter how good they are, when they don't know which way the price of gold is headed in the near term. This is not Quantum Physics, as it is basically only just good common sense.
There is also another older saying in the stock market that perhaps you did not hear before. It says that: "If a stock won't go up, it will go down". How long can gold keep trying the $700 mark, and fail, before it goes much lower, I do not know. But when you consider that $700 today is only $270 in 1980, that isn't a hell of a lot of money or a high gold price.
My outlook on gold is that both China and Russia will increase their Gold Reserves, which will drive the price of gold higher. When this happens, I do not know, but logic tells me it will this year. It will only be countries like Canada, who sells far more gold each year then what their government totally holds, who will get caught with their pants down, and see their beloved Looney take another beating.
GB