Gold Jun 2014/Dec 2019 Spread

There would have to be a serious growing interest in the spread trade between near futures and long futures. If gold is likely to move into backwardation as we saw in oil futures before the blowout, then the near futures price would eventually move higher than the longest dated futures. Still has a long way to go.

There are some technical problems with the charts here, so you have to remove moving averages and go to MAX:

http://quotes.ino.com/charting/index.html?s=NYMEX_GC.M14_Z19.E&v=dmax&t=l&a=0&w=1

Fair Value Measurements

When you have a Level 1 Financial Instrument, then this instrument is not unlike a AAA asset. For example, should you provide a payment-in-kind security that offers bullion it would likely have full valuation at maturity.

If you had been reading yearly results and delving into quarterly reports, the company is offerring Level 1 and Level 2 Financial Instruments.

Note that these instruments are supposed to be quoted in 000's. Reading through the latest quarterly report would suggest that the company is delving into marketing of Level 1 and Level 2 Financial Instruments.

The following link provides a balance sheet example of a bank offering mortgage backed securities(Securities Available For Sale - Note 7), but can easily be applied to a gold miner offering bullion. The fact that the company settled $246,868, meaning the face value of a single instrument, of which were issued 1000.

The company nowhere mentions that there were perhaps 1000 such securities available for sale, or that the face value is in the 000's, which is the correct procedure. They may have sold as much as 200k oz., at the close of the calendar year.

This is on Page 10 of the MD&A.

And the fact that ~$42m continue as liabilities on the books means that Waterton did not take the company up on the gold commitment, since they were looking to buy distressed properties and found that GBN.V was not in any way shape or form a risk of going concern.

Level 2 Financial Instruments can be assigned as Level 1 eventually, as they become realized.

I sincerely hope that I'm correct about this.

http://www.wikinvest.com/stock/Bank_of_Florida_(BOFL)/Fair_Value_Measurements_Contd

Poison Pill

In terms of a 'Poison Pill' strategy, diluting the shares unnecessarily, entering into JV with Masuparia, and dumping both Sprott and Waterton in favour of marketing securities as a bank would, all makes for significant hurdles for any prospective buyer of GBN.V shares.

But in terms of shareholders, you would call the opportunity to buy at virtually unbelievable discount a 'flip-in.'

A larger player would see the strategy and start accumulating shares, which is all they can do, but this company is totally ignored.

http://www.investopedia.com/terms/p/poisonpill.asp

$Gold Monthly

My guess that gold price charts are showing the completion of the first upleg in the '3' up-wave. On the monthly scale, you can see how little this correction affects the bigger picture.

http://scharts.co/1f7ky4t

-F6