GBN.V In Competition With The Bond Market

"Money Place

“We overshot yesterday and the day before,” said Larry Dyer, a U.S. interest rate strategist with HSBC Holdings Plc’s HSBC Securities unit in New York, one of 21 primary dealers that trade with the Fed. “Now we’re having a bit of a recovery.”

Volume in the Treasury market yesterday exceeded $300 billion for the second straight day amid disappointment Fed Chairman Ben S. Bernanke failed to indicate the central bank will boost economic stimulus. Volume totaled $313 billion compared with $365 billion traded the previous day through ICAP Plc, the world’s largest interdealer broker. The one-year average is $273 billion."

Bloomberg

Treasury market volume on certain days can exceed $300b. U.S., along with the support of the FOMC buying bonds out of the market and taking down 91% of the long-dated U.S. treasury bond auctions. GBN.V is in direct competition with this market because it can be demonstrated to be strongly inversely correlated.

A dividend payout will preclude this handicap. A 1¢ per share dividend payout as the result of proceeds from Q2 fiscal 2012 paid at the end of Q3 fiscal 2012(which concluded at the end of January, 2012) is something like a 10% payout. And yet this will not impair or reduce the chances of growth in the company in the least.

For Q4, the company can start a quarterly dividend payout of 3¢ per share per quarter and easily afford to do so, since processing rates and grades will suport this level of payout and in no way impede the growth and development of the company, EVEN IF they have grandiose "pie in the sky" bulk-tonnage mining scenarios which they hope to promote.

Hostile Bids Are In The Market

Secondly, its obvious that the La Ronge Gold Corp. results are meant to encourage traders to buy the stock so that they can eventually overtake GBN.V and buy it out with bulk tonnage drill results that are meaningless. The strategy is a simple and effective way of taking over the superior competing gold project. This is its sole purpose in the La Ronge Gold project.

Just look at how massively promoted a single drill hole with La Ronge Gold Corp. is compared to the news of mine expansion on Komis with GBN.V Which is the better news?

Trelawney was set up in the same fashion to take over Augen. And now they post results which are far below expectation. So if GBN.V paid out dividends as I describe, then shareholders will be very reluctant to hand over their shares in the hopes of eventually achiving this "pie in the sky" bulk tonnage prospect, when in actual matter of fact, the narrow vein prospects are begining to show some real promise. (especially considering the pleasant surprises of the Komis drill results.)

Conclusion

GBN.V cannot hope to impress upon people with distant "pie in the sky" bulk-tonnage development plans when the results from the mining operation are coming up roses. They can also not continue to impose on the shareholders indefinitely without providing a shareholder return. Not only this but updates on the 43-101 have not been tabled in years.

GBN.V must concentrate on the balance sheet and dividends rather than rely on arcane geological minutae if it has any hope of competing in the market. (We have had this demonstrated multiple times in previous years, year after year.) The emerging economic of Net Present Value of gold in low interest rate environments will set the tone for the long term.

-F6