A Huge Imposition

A huge imposition has been placed on the shareholders in the intervening years. Not only did Federal Bureaucrats hijack the project for several years pending the foregone conclusion of their rubber stamp of approval, market conditions were extremely adverse.

Now finally awaiting the definitive and overdue Q1 financial report, shareholders will only get the briefest of glimpses at depth of the business this company is involved in. Its been almost a year since commissioning was started, and no cogent financial information has been forthcoming.

Not only this, but are we to look forward to years of wondering whether the stock will ever provide a return? Part of the problem has been information not forthcoming until its obsolete, with no effect whatsoever on the markets.

Take a look at the drill core logs in the Bingo technical report, they are wildly different than what is presented in the coporate materials and diagrams of the mine, for example. Or the above-ground tailings holds approx. three years of effluent, and the Mallard dwarfs the size, but they claim only three years of operations. Personally this appears to be an effort to obfuscate the facts.

The company CAN go out of its way to make this stock an interesting investment, however. The company can make a safe haven investment for shareholders in the form of paying out dividends.

Take the Q1 fiscal 2012 numbers. Assume costs of $908/oz., average realized ounces of $1428/oz. and you are left over with ~$5m. after all imaginable costs are factored in. This surplus of overwhelming free cash flow could be paid out in the form of dividends to the tune of ~1.5¢ per share for the first quarter of operations. (or 1/2 ¢ per share per month.)

I highly doubt that the mine will incur costs of operations and development in excess of ~$40m per year, it would be a safe bet to say that this payout will not impair company progress in the least. (of course, I am not factoring in the tax regime, this needs to be said.)

Netolitzky stands to make all of ~$200k/month, should he choose to excercise all of his options and warrants, or ~$600k/quarter, making him one of the best paid CEOs in the country.

And yet, they have Rodney Orr, standing up in front of prospective investors during presentations, telling them with a straight face hinting at equity price gains in a relentless generational bear market.

Gold mines are holes in the ground with a liar at the top, its true. But providing for shareholder and investors holding onto their shares in the face of adverse market conditions, here is your favourable lie. Paying dividends. The sought-after definitive economic model is right under our noses should we care to notice.

Seems to me Netolitzky had better give his head a shake and get on with his golf.

GBN Tailings Approval

GBN.V tailings approval, what should be noted as an extremely rare event in the large scheme of things, has been noted in:

The Middle East

China

But had no effect whatsoever on the market in Canada. Canadians turn up their noses at gold mines, simply because they vote conservative, and that this will ensure a return on their housing investment.

Conswervatives Pay Lip Service To Mining

Never let them tell you that this governement will take up to four years to rubber stamp a mine, they would love for you to believe that it takes only a 'few months:'

Financial Post

Safe Jurisdictions

Looks like Columbia is going to present problems to gold mining investors, since the gold mining business is now presenting a problem in the on-going civil war in that country:

Financial Post

The Underperformance Of Gold Mines

Adrian Ash has decided to underline the obvious fact that gold mines are underperforming bullion. Gold miners are part of the gold markets, not a seperate entity, yet they are equities in the larger scheme of things:

http://www.safehaven.com/article/22904/gold-vs-miners-the-wrong-question-part-i