Stephen:
I actually posted a reply to your query about my favourite gold speculation, but I now realize that somehow, it never made it to the thread. The "Squid" monster strikes again. In any event, here's a quick comment. Picked a perfect day for it as well, as gold is down again. (G)
The company is Greystar Resources (GSL on the TSE). It is run by David Rovig, who has a good track record and is well respected. I've known David personally for many years and he is a class act.
The company has slightly over 7.0 million ounces of gold and equivalent already drilled and is expanding this. It is also located in good proximity to all infrastructure and is near surface. That is the good news.
The bad news is that it is located in Columbia, which is a worry for sure, but the U.S. government is keen to assist the Columbian government in any way it can to provide "alternative employment opportunities" (that is, an alternative to drugs), hence both governments are working in the background to assist the project to commercial viability. Additionally, many large multi-nationals have major projects down there and are not experiencing consequential difficulties.
The company recently completed serious step-out drilling which provided remarkable results. If filled in, the company expects the deposit resource to climb to over 10.0 million ounces. A major drilling program is underway to do just that. I don't know of any deposit like it anywhere in the Western Hemisphere.
A number of the "majors" have become interested and are quietly working at due diligence. As the larger gold producers have been moving back into acquisition mode, this bodes well. Much smaller and more remote situations have already been bought out in South America of late, so a buy-out is more than a possibility.
Kinross Gold, a major producer, has already quietly acquired over 20% of the company. Kinross is a very savvy outfit.
A small group of Canada's "old pros", guys who I respect for their superior understanding of gold and its machinations, have also been quietly putting this stock away for the last three years. My own estimate is that this canny gang, in combination with management, own better than 50% of the issued stock. The float is small and the stock is well owned by knowledgeable folk.
The company has excellent relations with the Columbian government. The locals also appear to be enthusiastic as the employment this project will bring to the area is badly needed.
The stock trades for Cdn$1.20 (US$0.81). There are approximately 47.0 million shares issued. It has plenty of cash in the bank account (Cdn$18.8 million at year end - over Cdn$0.40 per share).
I like this for a possible buy-out in the near term, and for the excellent value ratio at which it trades.
Best, Earlie |
