Tommaso: I had the same reaction (though admittedly without EA's background) when I read the Greystar results. It's the same reaction I had to CBR's results 2-3 weeks ago. The intercepts seemed not rich enough (in a length x grade sense) for an underground mine. I hope someone such as EA or EC will correct me my memory is incorrect, but I recall the knowledgeable people I've read on this and other threads indicating that you need intercepts with 1 oz/ton x 5' type of continuity to make an underground mine economic (with variations according to host rock, location, etc).
Of course deep underground intercepts (i.e., not mineable from surface) could get better, early in any big project, but my money runs scared in this environment. If the market has a pattern of selling on such news, I'd better do it too in any lightly held issues, and buy back later at a discount if inclined.
I can only guess that gold bull market sentiment kept CBR from selling off much after its very modest intercepts. Either that or everyone still in and adding as it goes up is laughing to the bank at the ignorance of us sellers. Maybe it's just me, but it seems the investor bar for what looks economic has been getting lowered at a faster rate than the gold price has been rising. The leverage of a higher gold price justifies that to an extent, but when I look at uptrend lines (and thus pullback potential) I'm not exactly bursting to buy into the $375+ underground mining stories. I'd rather hunt for really good intercepts.
Perhaps I've had my expectations unduly raised by Goldcorp-type deep intercepts and cheap surface deposits, but what's wrong with that? Used to be that when you're looking at weak results (as opposed to yet-to-be-disproven speculation), your money was either the quick or the dead.* I still see it that way.
*I think I owe that auteur, Clint Eastwood, for the phrase. Or Sergio Leone? |
