Article and my opinionHi Gents
Please find below an interesting article.
I would also like to say SFMI is what it is and has never been anything different. Which is a pink sheet stock. Myself and another investor joined forces about a year ago and did a lot of DD. The first thing was a trip to Melba by my friend. He was down in the States and drove 8 hours out of his way to go and check things out. We made calls to government agencies and dug up and talked to as many people has we could. We came to the conclusion that an investment was worth the risk. We attended the investor tour along with many others and have stayed in touch with management. We have hoped for the best but I know neither one of us has ever kidded ourself that as with any junior PM stock there was not some risk.
Have all things gone the way we would like? The answer is both yes and no. Was I surprised by the dilution. The answer is no. Did I like the dilution? The answer is no. Can I live with it. The answer is yes. What has happened to SFMI is the same as what happens to every other junior PM company. It costs to get things done. Whether that is equipment, drilling or services. That is just the way it is and SFMI is no different than junior company XYZ.
Investing in this company and then re posting assay results and questioning transparency when the mill is just weeks away from starting is in my opinion like shutting the barn door after the horse is already gone.
I have done as much DD as I can and I have made the investment. The mill is about to start and the 380 page filing should soon be submitted.
Am I nervous - a liitle. Am I hopeful - a big yes. Am I willing to take a big loss - hopefully no. Am I willing to take a big gain - hopefully yes. Am I sticking with it - yes. Am I going to complain about a loss - no I will take my lumps and move on. Am I going to celebrate a gain - yes I may even drink to much.
For me it is not rocket science. I invested in a pick sheet stock and it is what it is. I did the DD and thought the risk reward was worth the investment. Hopefully in about 1 month all things will come together and I will have a nice hang over from celebrating ownership in a gold/silver producer which is listed OTC BB. If not life goes on and I will look for the next stock.
GLTA
Regards
Financial crisis great for gold
GFMS CHANGES VIEW Swift interest rate cuts, weak US$ will help bullion
The world’s best-known gold consultancy has had a change of heart.
BEAWIHARTA / REUTERS
An employee holds gold during processing at the PT Antam Tbk. precious metal refinery in Jakarta yesterday. Governments’ fast response to the global financial crisis will create inflationary pressure and a weak U.S. dollar, which will benefit gold, GFMS says.In a report released yesterday, GFMS Ltd. predicted that gold could hit a record high this year, saying that the price will average a hefty US$915 an ounce and could shoot as high as US$1,080.
It was only last year that London-based GFMS was very cautious on the gold market, predicting that it could go bust in 2009 if investment demand dries up.
But the dramatic upheaval in the global financial system has changed everything, according to GFMS executive chairman Philip Klapwijk.
“ The main reason we changed our take is the response of governments to this crisis,” he said in an interview after a presentation in Toronto.
“We would not have suspected such remarkable government spending pledges, and the speed [with] which the U.S. cut interest rates. We thought we would have had a more orthodox policy response.”
With the U.S. and other governments pledging trillions of dollars in fiscal spending while central banks do everything they can to stimulate the economy and calm financial markets, Mr. Klapwijk said the end result is likely to be inflationary pressure and a weak U.S. dollar. Those traits are great for gold.
Right now, there are far more concerns about deflation than inflation. But investor demand for gold is expected to remain strong in this market as they look for a reliable store of value, according to GFMS. Gold has been the best option in recent months.
How long this gold boom lasts depends on how quickly inflation takes hold and how long governments and central banks accommodate it, Mr. Klapwijk said.
“The potential is still for major new money to come into this market and drive prices higher,” he said.
The current boom in gold prices has been driven entirely by investment demand. That has disguised the fact that jewellery and fabrication demand have plummeted in response to high prices. GFMS expects this trend to continue, predicting that jewellery demand will fall 11.1% in 2009 while net investment demand rises 89.4%.
Any weakness seen in demand is expected to be offset by weak supply. Overall supply is projected to drop 0.6% this year to 1,888 tonnes.
Mine supply has been fairly flat for a number of years, and GFMS expects that trend to continue. That is because the exploration boom of the last several years has turned up very few great discoveries, and now there is virtually no exploration going on because junior companies are hoarding cash and fighting for survival.
“Mine production is not going anywhere. I think it is on a flat trajectory. In the long term, it could even be down,” Mr. Klapwijk said.
With few sources of new supply to speak of, he does not expect that gold will fall back to its historic lows of around US$250 an ounce that were reached early this decade. But prices could sink back to the US$500 range if big gold holders such as the exchange-traded fund sell into the market.