In all fairness I suppose that it must first be pointed out that all of the junior miners tend to be undervalued on a relative basis and hence the market as a whole stubbornly refuses to acknowledge the tremendous value in many of such stocks. But even so, it just seems like CSG, in consideration of the fact that it is already producing gold while also ramping up production, in addition to having reserves priced in at perhaps the lowest levels of all, may just as well have rabies as far as the market is concerned. It seems to get the biggest "snub" of all from the market. When it comes to CSG the market doesn't seem to care what the price of gold is .....no matter. The market may just as well have sent flyers to every home in the investment community on this stock and if I didn't know any better I'd guess that they wrote something of this nature: "BUY CSG AT YOUR OWN RISK .....WE ACCEPT NO RESPONSIBILITY." OK, admittedly this probably didn't happen. But the stock behaves as if it did happen.

So lets recap. According to the recent update on the Castillo mine the company had this to say"

Mine production rates at El Castillo have been steadily increasing from an average of approximately 60,000 tonnes of ore per month in the third quarter of 2007 to roughly 120,000 tonnes of ore per month in the fourth quarter of 2007. Darren Koningen, Vice President of Operations for Castle Gold, said: "We are happy to report these production numbers for the initial ramp-up period of operations at Castillo. The increase in gold price has allowed us to substantially reduce our mining cut-off grade at Castillo, which in turn has given us access to significantly more ore in the pit area than was originally planned."

Given the increased gold price and reduction in cut-off grade at Castillo, Castle Gold has retained A.C.A. Howe International Limited of Toronto, Canada to prepare a new ore reserve estimate and an updated mining plan for the Castillo project. Management expects to receive the ore reserve estimate and mining plan in the first quarter of 2008, and anticipates that the new mining plan will include a substantial increase in annual gold production. Plans are already underway to accommodate this increase.

Did I miss something? Gold is in the 920's. A very conservative company report analysis put the Net Asset Value at a very conservative 1.10 (roughly) per share. Production should be at about 42500 ounces in less than a year from now, corresponding to a cash flow that probably isn't too far from 25 million dollars .....and this from a company with a market that assigns a market cap of roughly 43 million. So, I don't know, maybe the market wants the market cap to equal the cash flow and hence is waiting for it to fall down to 25 million until they become interested in buying CSG.

Either way it represents the most puzzling stock I've ever owned. This stock should be trading in the .80 to 1.00 range as far as I can figure. But obviously when it comes to CSG I accept the fact that I may just as well be investing in some company mining for zinc on the moon. Either way there is no rationale or sense to make of it all. Patience is obviously the key here. But even so ...it is nice to at least see your investment get "rewarded" at least some (rather than continue to get mercilessly punished) while such fundamentals for such a given company would/should be improved so tremendously based upon everything that I have looked at and looked into. To put it in another way with production increasing so tremendously and with gold increasing from the 700s to the 900s shouldn't CSG have actually gone UP over the last several months, rather than falling from the upper 80 cent range to the upper 50 cent range?!!!!!!!

Does this make sense to anybody?! Is this one of those things where I am supposed to stand on my head in order to make proper sense of it. So what happens if gold hits 1000 dollars? Should we expect CSG to be trading at 48 or 49 cents then?!!!! If CSG declares that they'll increase production to 50 -55,000 ounces per year should we expect yet another drop?

I think I need to just turn my computer off and come back in a year and then see where we are at. Everything in between strikes me as nothing more than just a crooked market striving to suck out as manydollars out of the small guys as possible.

Either that or I should just put my money into some Lemondade stands. At least I am able to understand the business there: You buy lemonades, you make lemonade, and then you sell the lemondade. The more you sell, the better. The higher the selling price, the better. It all translates into profit via a linear fashion. With CSG though everything is upside down.

With all that said I will now turn my mind to other matters that I am able to make sense of.

Good luck to all. Patience will eventually reward my battered, bruised, and abused investment. But in the meantime it is one epic waiting game that defies all logic.