WHAT THE ANALYSTS CANNOT COMPREHEND

WHAT THE ANALYSTS AND INVESTORS CANNOT COMPREHEND “THE GOLD PRICE”

There is one thing that Stockbrokers, analysts, traders, banks and investors (the gang) whether investing directly into projects, raising monies or loaning monies or shareholders investing in ASX or Globally listed Companies. The “gang” just cannot get their heads around the Gold price and continue to value a Mining Company by the ounces they report, instead of the dollar value. The just cant get their head around it. Brain just cant go “CLICK”.

The sooner the market “GETS IT” the better. To give an example let me take you back thru the Gold price graph in $US, because, I am certain most have forgotten THE GRAPH. In todays world, a long time to concentrate is around 1 hour. A long term investment is 24 hours. The words, “ill put them in the bottom drawer and forget about them” has long gone. Most people today don’t even have a chest of drawers.

BARE WITH ME I WILL GET THERE

In 1987 Gold fell below $US300 per ounce. In 1990 bounced back to $US360 ounce. In 2006 had jumped back to $US400 and by 2016 had risen to $US1,050 ounce. It peaked in 2011 to $US $1900 ounce. OK quick lesson, now you know the volatility of Gold. Another thing you probably didn’t know. In Australia up until 1989 Gold Mining Companies never had to pay tax. (just when you thought you knew everything)

NOW THIS IS SOMETHING EVERY ONE NEEDS TO READ (Newbies please read)

100,000 ounce resource in 1987 had an inground value of $US30m 1,000,000 ounce resource in 1987 had an inground value of $US300,000,000 So to have a gigantic Resource the market wanted to see 1 million ounce resource before you could pump your chest.

HERE IS REALITY CHUMS

100,000 ounce in ground resource today is worth US$177,000,000 or $256,000,000 200,000 ounces today has an inground value of $US354,000,000 or $A512,000,000. No mining company needs a million ounces anymore.

REALITY: 200,000 OUNCES TODAY IS WORTH $US54,000,000 more than 1,000,000 ounces a few years back.

SO WHAT DOES THIS MEAN? 100,000 OUNCES IS WORTH TODAY A QUARTER OF A BILLION AUSSIE DOLLARS. 200,000 ounces is today worth more than half a billion dollars. Why should mining companies spend millions of dollars drilling up a million ounces. Its an exercise in futility now and doesn’t make sense. The market wont give you anymore credit. The market wants to see Gold Production.

Its almost like the Stockbroker’s and the market in general, including investors, shareholders and traders have to be re-trained, re-programmed. There are companies that have 100,000 and 200,000 ounces and the market over looks them. “Oh no you need a million ounces”. The market and the brokers, most inexperienced and more interested in playing games on their phone than understanding mathematics, don’t get it.

THE WORLD FUNCTIONS ON THE VALUE OF THE UNITED STATES DOLLAR (THE GREENBACK) NOT OUNCES OF GOLD. THE GOLD IS SECONDARY.

If you walked into a restaurant and ordered a beer and a pie, an ounce of Gold could not buy it, “sorry we only deal in cash or credit card.” I rest my case

CHUMS RE-PROGRAM YOUR PEOPLE.

Story by John Craig

Goldman

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