via Mining.com - Can Juniors Borrow?

The following article gets into specious reasoning that lending money to juniors is risky, therefore requires higher rates of return, practically guaranteeing the company visits bankruptcy, therefore only to lend in jurisdictions which have better bankruptcy guarantees. But because they lend, they hope it's all good. Not acceptable.

It would be far better and less complicated to work out a deal with GBN.V, that Sprott lends money for the La Ronge Gold project closer to market rates, rather than usurious ponzi scheme rates, and buys a significant portion of the company if they see a return of a certain dividend above a certain IRR.

Sprott as a resource lender has lagged as much as any other resource lender, simply because they believe that their position of priviledge gets them a higher interest rate, far above market. Just look at any resource lender, they have all performed badly. The rates they are seeking are beyond hopelessly imaginary, based on questionable economic theories which still have yet to be proven after several decades, and are basically a roll of the dice.

GBN.V, for their part will have to come up with a PEA or bankable feasibility and start fucntioning like a gold miner, rather than a heavily sandbagged vanity project.

http://www.mining.com/web/can-juniors-borrow-instead-of-raising-equity-kenton-ralph-toews/

Rick Rule is fond of repeating that junior miners are living in the past, thinking they can get lending rates available years ago. I have some news that Canadian bond rates are low, and meant to remain low for years to come.

If there is a housing bubble crash in Canada, which is by now a foregone conclusion, rates are going to go lower, not higher. The longevity of the housing bubble is a function of bond markets in Canada. The housing price bubble is not a permanent fixture, though government bond markets are more likely to remain solvent even if the economy turns turtle. American rates are not a reflection of Canadian rates or a reflection on the outlook of the Canadian economy. Canadian bond markets are not due for a downgrade, though you might suspect that U.S. bond markets are overdue for one.

Rick Rule should take his cue from Warren Buffet, Carl Ichan, and others who stand to benefit from the decline in the Canadian dollar over the last year.

http://video.cnbc.com/gallery/?play=1&video=3000224505

$Gold Weekly

The gold weekly chart, with annotations that indicate a one up-wave completed as the beginning of a five up wave of a longer term Wave One extension suggests that the paradigm is very much intact. But a mania rise in gold prices are not really in the cards if the paradigm holds true.

Moreover, tapering will have unintended consequences overall which will lead to a risk reversal in equities and gold.

Still waiting for that weekly crossover in the ADX:

http://scharts.co/18tFEEK

GBN.V P&F Chart

GBN.V P&F chart says that the bearish price objective has been reached. For a long time the bearish price objective was zero, but this time is 2¢.

With a market cap of less than $6m. dollars, the price does not reflect what is going on in the La Ronge Gold Belt. There has been $150m. poured into exploration and development in the 1980's, perhaps half that much into development since 2000, and the company is in production with a licensed TMF, and a de-risked prospect.

stockchart.com

-F6