I need your patience in developing a thought regarding this Coxe post.

In the last gold stock bull market South African shares way way way outperformed North American shares despite having the highest cost of extraction due to very deep mines and an extremely strong rand. Outperformance with high extraction costs - how so, you ask? It's simple. Gold in the ground is "worthless" when extraction costs exceed the current POG (sort of). But in a bull market when the POG crosses that extraction cost marginal increases in POG make for HUGE increases in profitability. It's analogous to a way out-of-the-money option going positive. Big time explosion in profits.

I view the current explorer/developer/near term producer space as analogous to those South African mines. Current market conditions - specifically financing uncertainty - makes them currently "out of the money." But when POG gets to the point where nobody gives a crap how "risky" it is, just give me a piece for my financing - BANG. There will be no three phases of the microcap bull market. It will go straight from flatline to parabolic.

And BTW, can anyone think of a better contrarian indicator than Skellig's quasi-pessimism? Nothing personal Gene, but you will likely make way more from your shares than your books.

Strike