Hi, Brian. Thanks for your explanation on the slow but steady price drop.
My point about cost per ounce being tied to total reserves is that, when you look at Guido's report, you see wide variation in concentration. That is why further sampling work was needed to get a more accurate estimate. Moreover, the geologist errs on the optimistic side for results yet to come. I suspect that reality will be good, but not fantastically so. The sampling done so far and its results ( as published so far) make both reserves and average concentrations difficult to estimate, making in turn cost per ounce hard to evaluate. I would prefer to see a cost of extraction and treatment per ton or cubic meter of material, especially for an open pit operation. That way, we would know the cost of getting the stuff out, and the uncertainty would be strictly on the revenue side of the equation (i.e. how many ounces of gold on average can we expect per ton or cubic meter treated).
However, I agree with you that starting production before getting really excited is a good approach, especially after the Bre-X fiasco.
That is why I invested in Golden Eagle. It is a risk worth taking and, at the current prices, even if as you mentioned the number of shares rose to 250M, $2.5M a month would result in $.01 a month per share or $.12 a year, which is great when you buy at $.07 or $.08.
Thanks again
Michel |
