$CDN Gold Price

The Canadian dollar gold price closed @1687/oz. $CDN on Friday. Kitco quotes $1700/oz. CDN after the close.

A $100/oz. rise in the average realized gold price at a processing rate of 70k. oz per year works out to 2¢ a share fully diluted.

Very unlikely that we will see £1000UK/oz., $1600US/oz. again in our lifetimes. GBN.V is obtaining a small premium for its gold price sales in terms of Canadian dollars as the $CDN is trading below par with the U.S. dollar.

GBN.V is in very much the same position it was last year after commercial production was declared in April 2011 and saw a rally in gold prices over the summer. Share prices were lower overall since that time despite a profitable gold operation and early payback of the Sprott loan.

The payback period in the preliminary economic analysis suggested a payback period of 2years, but very likely the payback for the initial sums invested will have been completed by the end of fiscal 2012.

Overall robust gold prices in the last year and the Waterton financing suggest an early payback completed for fiscal 2012, rather than a lack of profitability. Earnings for the 2012 fiscal year should be around 7¢ a share, for a fair value of 70¢ a share based on 10P/E over trailing earnings. Adding book value will give you $1/share.

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-F6