via BNN.ca - Ecclestone

Ecclestone likes GBN.V, but mentioned this over a year ago. Not long after he was looking into the company, production was drastically curtailed in February, 2012. Note that he mentions emerging producer costs BELOW $800/oz.

Gold prices are now $1448/oz. in the after-markets on Friday. Direct double-barreled shot-gun blasts of physical divestment is not hurting the gold market. The reason being that if you suddenly liquify an illiquid market in physical bullion, this will also open the flood gates to leverage in the futures markets.

I calculate that during Q2 and Q3 of fiscal 2011, which ended April, 30, 2011, costs were at least in line with the PEA issued March 2009. $674/oz.

Given that the markets are adversely against gold miners and biased towards treasuries, and that regulatory adjustments have made scaling the walls of production near to impossible, and that tax regimes no longer favour developing miners, and that no reaction was seen to developments in the Komis deposit, the SOLE avenue left open would be full production.

Lenders to the resource sector will have to dial down expectations of usurious interest that saps productive capacity in developing companies, much as the regulatory requirement does, and take a larger interest in the companies they lend to.

GBN.V cannot hope to escape the trap of a developing producer without adding borrowing costs to the mix, and in order that investors take the company's side, will have to pay dividends.

http://www.bnn.ca/News/2011/10/5/Feels-like-2008-for-gold-stocks-TD.aspx

-F6