One Chart Says It All

One chart says it all about producing gold miners, this is one detail surely missed by most of the investor crowd. Now, if the numbers coming out of Roy Lloyd are correct, that the head grade of the mill would be in the range of roughly ~17 - 20 g/t, as have other producing mines in the belt, then GBN.V is valued as a gold explorer with only 1 million ounces in the ground.

Now, the last time anybody compiled information on valuations was Edson of London January, 2010. Golden Band, with its huge float, but restricted market cap is trading according to the valuation of its gold in the ground on an inferred basis, and has made no significant advance in terms of valuation since the 1980's.

The Saskatchewan Mining And Development Corporation (now privatized Cameco) drilled off all of these deposits, though GBN.V made a breakthrough on Roy Lloyd by connecting the bingo deposits.

"The Bingo Structure, at present, has an average width of 2.8 m (9.2 ft)

along a strike length of 285 m (935.0 ft). "

source: http://www.ir.gov.sk.ca/dbsearch/MinDepositQuery/default.aspx?ID=2627

Thus, the Bingo structure, or the Roy Lloyd mine, is twice the strike length of the depression-era Pickle Crow Lake mine, which was considered the proverbial gold mine due to its paying a dividend to its shareholders for some 30 years. Bear in mind that the Rod Zone of the former Jolu mine in the vicinity of the mill has a 900m strike length , and that's just one zone. The Jolu complex of deposits and the Bingo deposit are very similar in nature and disposition. (My reading on that is Jolu is a good comparable to the former Lamaque mine in Val D'or, even though there is zero information to go by.)

The company has not provided any easily discernible graphic that shows the strike length of the Roy Lloyd mine, so very likely the strike length of the high grade portion is somewhat larger.(though I don't think this can be improved upon by a very significant amount.) None of the diagrams or any information on the mine are recent, and date back to 2006. The overall strike length of the Bingo deposit is 900m.

The challenge for the investor would be to take on a reasonable portion of the float within their means, and to keep up with dilution when it occurs. This is no easy task.

btw, this article basically says it all:

source:http://www.zealllc.com/2011/huivalu7.htm

Wall St. Journal Article

The Wall St. Journal recently came out with an article with very similar conclusions, but focussed on the majors. A decline in P/E along with a rise in dividend yields.

files.me.com/fransix/2pabdx

Seeking Alpha

"Being in the business of literally pulling cash out of the ground means that precious metal miners must pay higher and high dividends to maintain their claim as an option on bullion prices that is more attractive than merely physical gold."

Seeking Alpha - Gold Equity Outlook

Reuters

A more pessimistic outlook for gold miners at Reuters. Should commodities prices decline, and gold manage to keep its value relative to these declines as it had in 2008 - 2009, then the thesis that rising costs may affect gold miners is wrong.

reuters

GBN.V has two analyst ratings: