In The Event Of A Gold Price Correction - What Happens?

Should the onset of a major gold price correction ensue, then the earnings of the company would be in doubt. Its my position that they should pay out a dividend in order to ensure that investors obtain a return on the average realized gold price.

The gold price, if it had a major correction, would likely test the 89-week EMA. @$1450/oz. U.S., and if they obtain the nameplate 700tpd. processing rate, and an average grade of 10g/t, the company can maintain a 3¢ per share per quarter dividend, based on a fully diluted float through the correction into the recovery of the gold price, until the next extended rally. If they manage to maintain this average, this will absolutely NOT affect their development plans, barring any major unforseen equipment failures.

The EP Zone is meant to provide 7 months of ore, not including the source rock. The mill is presently under-utilized @500tpd, which includes ore from the Alimak Zone. The EP Zone ore will top up the processing rate to 700tpd. The grade in this deposit is very probably grossly underestimated, simply because the recovery rates are totally uncertain.

They have the processing rate, they have the gold price, let's see if they manage the grade.

-F6