$Gold:$CDW

The Canadian Dollar gold price need not go very far before the resumption of the gold price is under way. The breakout level would be in the $1600/oz. range, gold prices traded up after the close in after hours which is not reflected in the price on stockcharts.com.

supersize: http://www.flickr.com/photos/11747277@N07/7659323542/sizes/l/in/photostream/

http://scharts.co/M09HGl

GBN.V Daily Ichimoku

One technical method that has proved utterly useless in the analysis of the decline of GBN.V stock prices is the daily Ichimoku. I would not rule out any further declines at this point, considering that there are no buyers for the stock.

When the buyers are on strike, the sellers are in control. So traders sell the stock without first owning any, as this is the commercial banking sector, and the money raised is used to parry into bond assets.

The problem comes in when there are litterally no buyers, or sellers to speak of except commercial banking sector traders desirous of making a quick buck.

I would say that since the Waterton deal is taking so overly long, that it will have collapsed by now. That might cause further declines in the stock, as somebody is likely to panic, Waterton may turn out to be the hostile buyer.

The company has no defense against an hostile buyer since almost all of the shares sold into the market have served as a short sale for an equity swap. Nobody takes up their voting rights as a shareholder or wants to. You never seem to get the chance to vote out the management anyway. (the point of voting in shares should be voting in favour of the managment so that you take ownership of the the company.)

As an equity swap holder, you retain voting rights, even though you don't own any shares, so you can pass off the asset to a buyer without much fuss. Just look at Brett Resources, Aurelian, Trelawney, Underworld.

This is what I predict for GBN.V. Unless GBN.V suddenly has an immediate volte-face, and starts honestly reporting financials, paying a dividend, and sharing with their shareholders just what it is they think they're sitting on, and what the PEA really should look like. But, as they say, the legacy issues are solely with the management.

Note the reversal in TLT, there was no subsequent reaction in GBN.V.

supersize: http://www.flickr.com/photos/11747277@N07/7659361578/sizes/l/in/photostream/

http://scharts.co/QQ8BSY

From The Web

You should be feeling sick:

i5research

In Search Of The Ten Bagger

The Filipino rainbow

Red 5 (RED) is one such gold miner whose price has halved in the past four months. Radar has mentioned Red 5 in the past, partly because of its funding issues, partly because of its production problems, but mainly because of the big potential of its Siana Gold Project in the Philippines.

When we spoke to managing director Greg Edwards in April last year he was on site and the area had received more than four metres of rain so far that year.

Perhaps it's because of the weather, but Red 5 had seemed to be mired in the development phase. Anyway, it's finally getting its act together.

It forecasts about 75,000 ounces of gold a year with cash costs of about $450 an ounce.

What this result boils down to is that it will soon be generating earnings of about $80 million a year, and its market cap is only double that.

More to the point, in those parts, you can't build a plant for less than $200 million (it would cost about $100 million in Australia).

Ah, but what about the gold price, you might ask.

It's hovering at about $US1600 an ounce, and gold companies always seem to understate their cash costs, leaving out the actual cost of building the plant, and little things like that.

Let's say that some of these companies have true cash costs of $1000 an ounce (the Aussie and US dollars are close enough in value to be interchangeable for back-of-the envelope calculations), rather than the $700 or so they claim. In that case, even if the gold price falls to $1200 an ounce, the plants are still profitable.

Read more:

http://www.brisbanetimes.com.au/business/in-the-hunt-for-a-10bagger-gold-miner-20120727-22xng.html#ixzz21sLSPef4

Total cost per ounce quoted by Red5 is $635A/oz:

http://red5limited.com/files/Red5-Profile-June2012-SiteVisit-A4.pdf

BNN.ca - Interview With Sean Boyd:

Note the cost per ounce of the Lapa Mine, which I had already compared to Roy Lloyd.

http://www.bnn.ca/News/2012/7/26/Ottawa-shouldnt-have-say-on-gold-company-ownership-Agnico.aspx

Look at the known gold resources in the world:

http://www.resourceinvestor.com/2012/07/27/ranking-world-gold-mines-deposits?t=precious-metals

Dr. Marc Faber

Things are coming to a head with sovereign debt problems in Europe, as well as The Federal Reserve having to come to some sort of decision. Dr. Marc Faber suggests waiting at least 10 days before moving ahead:

http://www.resourceinvestor.com/2012/07/26/marc-faber-says-hold-up-investing-for-10-days?ref=hp

-F6