Sam, apparently some people categorize me as a gold bull because of my association with the GPM thread. In fact, the subject attracts a wide range of interests, and it beats me why I am associated with any one over the other.
Most of my work on the GPM thread consisted of trying understand the structure of the world economy, capital flows, banking, interest rates, inflation/deflation, etc. From this, I thought one might extrapolate broad trends in the world economy, and their likely effects on the Price of Gold. It was a worthwhile exercise.
However, at some point I decided that the idea was backwards. The truth was that gold always was, and remained, a leading indicator, and that in fact it had once again unfailingly indicated the trend well in advance. Furthermore, I decided that gold was "reacting" to, (or rather, indicating), the same thing it had always "reacted" to: the rate of inflation.
That being the case, I decided quite some time ago to stop trying to determine the future direction of gold, and instead to watch the economy with one eye, and wait for gold itself to indicate the trend.
On WSP, I classify myself as a skeptic. I have been trying to do some dd on a fairly extensive history in a limited period of time. On the positive side, the information I would probably rate most highly so far is the scoping study by MRDI. Still, there are a number of doubts to be overcome.
The first is that I remember the WSP thread of old, which I visited on a sporadic basis. Seems to my recollection that there was a lot of screaming about insider sales that were disclosed after shareholders had been crushed waiting for all the promised big news. I think I recall that "Randy" was a very dirty word on this thread, the mere mention of which could result in some serious cyber ass-chewing.
We think we have a lot of advantages these days with the internet, BCSC insider trading, etc. But everyone knows the new rules now, and guys who want to find ways around will be finding them. The rules have changed, so the playing field will be shifted. So my antennae go up when I hear hype coming down the pipe, because I have heard it before. I want to know whether the current valuation can be justified by the results to date. The greater the speculative value, the greater the risk of a retracement. Maybe assessing the risks is considered to be only for pu$$ies nowadays.
The second is that they have taken this 5000kg sample, and I think I heard that results might not come out until June? So I wonder what is going to hold up the stock in the meantime. When all the newsletter readers have finished driving the stock up, then what? Am I correct that the stock has a market cap of C$100 million, and ten million more shares coming out?
The third is that it takes a long time to make a mine. Maybe this thing sails right to the top, then again, maybe it drags on for years. Maybe there is not much more than currently indicated. Maybe the property will disappoint. Have very many people considered that possibility? I don't know enough yet to make a judgement.
At least on ARP, one could point to Pascua 6 km away as the archetype that would indicate the model. Is there an archetype for Pascua? If so, where?
Anyway, you asked and those are the best answers I can give right now.
Good luck to you - Tom |
