Daily GBN.V

The longterm daily chart bears some watching, as it shows just how far along the crash in the stock price has come. We have tested the 300-day MA, as well as hovered just above the 36¢ level. This price level is important to the development of the stock price, since a violation of the price will mean that the elliot wave count is completely invalidated.

Because we are apparently at a very important juncture, I put in the '4' downwave count, and may actually be forming another inverted head and shoulders. The accumulation/distribution shows the depths of the correction.

Some of the technical traders on the short side are jumping on the stock decline as the moving averages cross over. The dilution in the stock and the inappropriate pricing of the financing, as well as information not forthcoming to shareholders have all contributed.

I would say if I was watching the stock and didn't know any better that the company was going out of its way to scuttle the project, despite the positive developments. 10g/t is not chicken feed in the mining world, and matches the David Bell mine in the Hemlo deposit in grade.

Conclusions: That the market did not react to positive developments means that the market will either completely crush the stock or that traders on the short side are selling into the bottom are on the wrong side of the trade and will have to settle those trades.

supersize: http://www.flickr.com/photos/11747277@N07/5716086964/sizes/l/in/photostream/

stockcharts.com

Gold Weekly Chart

The interesting thing about technical formations is that you get a nice number to work with and a recognizeable shape. In the gold weekly chart, we are seeing the formation of rounded tops followed by rallies in the gold price. We have yet to form a second rounded top, as had occurred in 2005 - 2006.

supersize

stockcharts.com

Seeking Alpha

"Precious metal investors may be repositioning from bullion into mining stocks. This current consolidation may be the catalyst to help the miners catch up with the performance of gold and silver bullion. Mining stocks have not yet seen the speculative levels that bullion has seen and is currently reaching oversold levels. Miners, especially junior explorers, are providing a discount to bullion. Inflation will continue for years to come yet this correction in the junior miners indicates that the public is still unaware of the basic fundamental and growth potential of this sector over the next decade-- especially when gold and silver find support. It is very hard to find high grade deposits in mining friendly jurisdictions. I believe that we may see a market that will value precious metals exploration and emerging discoveries of high grade, low cash cost deposits."

Seeking Alpha Article

Bank Of Canada Inflation Calculator

What cost can we assume in the La Ronge Gold Project? The Komis deposit, which graded a lot lower than the Roy Lloyd mine with a lot of grade dilution, was said to cost $390CDN per oz. The Komis mine shut as a result of the decline in the gold price below cost.

(The Seabee mine with an even lower grade managed to continue operating despite this.)

So if we factor for inflation, the cost to mine in an obviously higher grade mine, even though you take into account a dilution perhaps as severe as the Komis mine, the resulting cost per oz. should be in the neighbourhood of ~$516CDN/oz.

http://www.bankofcanada.ca/rates/related/inflation-calculator/

Articles Of Interest

RAB Special Situations

RAB Special Situations closed because of investor withdrawals was once one of the smartest investors on the venture exchange prior to the crash in 2008. (I found this news quite surprising)

Financial Times

BHP Billiton To Headquarter In Saskatoon

http://business.financialpost.com/2011/05/10/bhp-billiton-plans-move-to-saskatoon/

Peter Munk On Gold

http://business.financialpost.com/2011/05/11/munk-certain-where-gold-is-going/

-F6