Let's not just get into negative hype mis information, or mindless cheer leading...Let's get real.
After looking at the report is anyone concerned about the amount of ounces ? Future stock price appreciation is now going to be very dependent on growing resources..Management has done a good job in meeting targets and doing what they've said they would do and that has been beneficial to the price up to this point..However the resources are kind of low EVEN now after the large drop...
So now it's an unknown if the resources are there and pretty much a gamble...Do you buy and hope they come up with more gold ? or wait for more drill results ?
<<Hoch may not approve of Mgmt today but, they did approve of this resource to begin with. They put their money where their mouth is...and this is their very area of expertise.>>
"Approval" does not come at any price.
Yes, I don't believe that anyone would disagree that, looking back, and taking yesterday's PAH report into consideration, that a single digit price for the stock that Hochschild paid made sense. That was then.
<<In effect you are then approving and blessing a series of apparent and acknowledged hatchet jobs.>>
I just re-read the Barron's article, because I seem to recall an issue or two that was unfair.
The issue was regarding Jason Reid selling his stock after Barron's interviewed him, tipping him off for the negative article.
I do not know if that were actually true.
But as far as the rest of the article is concerned, I believe it was tough, but fact based.
BTW, here's a comment about a prediction that never came to fruition:
<<Reid claims that the company's mine, and an underground mine that was begun later, will yield enough lead and zinc byproducts to pay all of the cash costs of producing the gold and silver, leading to "zero cost" precious metals to sell, versus an industry average cost of $500 an ounce.>>
Hasn't happened. And he was improperly comparing his essentially silver mine to a study of gold mines.
NI 43-101's are necessary for explorers moving into production for purposes of wooing financing for construction costs. When your in production, it's still nice to have the "official seal" of meeting NI standards, but an expense you can save if you want to proceed taking the risk.
I think more little producers are adopting "NI absent" mining plans looking to a future increase in the POG to add more value to lower grades. Eduaro Lunna, Board director with SLW, is operating similarly just a bit up the road from GORO with his little sneaker operation Rochester Resources - but give 'em credit, like GORO, they are debt free, and producing a little bit of gold equivalent ounces, trying to grow their operation without much in the way of NI 43-101 compliance. Perhaps EL, having been past President of the Mexican Mining Operations for several years, has had an influence on GORO management, and they are sharing a similar mining plan.
To answer your question, not very concerned. GORO is in great shape. If they hit only 100k ounces of production for 2012, that's a 30%+ increase over 2011. Is that bad news? I really dislike analyst reaction that downgrades missed guidance as a big disappointment and fails to acknowledge the accomplishment of a fine move in the right direction, as a 30%+ increase in annual production would be. It's like the Wall Street crowd staging a big Dow rally over news that unemployment is down .2% to 8.1% as if 8.1% unemployment was a good number, but that's our world!
So you get a big sell-off of GORO shares over a company that failed to reach a lofty goal, with no perspective on the strength of who they are, or the immediate potential for what their product is worth in this global economic environment of today. Never forget GORO is a producer of real money - gold! Unlike almost every other industry out there, the future for gold, due to the global currency crisis, is very, very bright.
The report says they know where they are going to be mining for the next three quarters. They know what they are doing far better than any of us far removed from the front lines. Have a little faith if you care to. The GORO folks seem like a nice bunch, and they offer monthly dividends, much like GG, only GORO's dividend is available in a physical payout. Now that's worth some support. GORO is showing some leadership in a direction I can appreciate.
The events leading to new highs in the POG, and far beyond, will be unfolding immediately. GORO is a fine hold in any portfolio that is looking to increase its exposure to gold. Sure there are other good companies too, whose production numbers are 10 -20x GORO's. I like GORO's low number of shares outstanding. With the coming increase in the POG, GORO's share price will move up nicely. It's a great buy way down here. I expect a lot of new money will come into the market when there's news that is gold positive: Ben says this, Israel does that, Greece drops from where, China stops buying what?... any of it can send the POG soaring. Oh, hey all of you manipulating shorters, what about some ...Did-what-to-the-uptic-rule headlines? It's coming. Right makes might.
GLTA GORO longs.
grednam2000...All excellent points...Yup if they hit 100,000 ounces it's still a 30% increase which is actually a substantial ramp up in production...You get tired of the negative SPIN put on news regarding this sector...And if one this is for sure GORO is definitely a leader regarding dividends and paying dividends in gold...Definitely a gold friendly management team...I recall Jim Sinclair a few years ago suggesting paying dividends in gold to really get the shorts...
>>So you get a big sell-off of GORO shares over a company that failed to reach a lofty goal,<<
If it can't reach the lofty goal, then it's not worth the lofty valuation. GORO has proven over and over that it can't reach the lofty goals.
>>I like GORO's low number of shares outstanding.<<
Another idiot who doesn't realize that the share count is ALREADY incorporated into the market cap.
Remember when the Reids also knew what they were mining in the open pit that ended up being less than half the expected grade? Remember how the company was going to mine underground at zero cost at higher grades? Incredible how anyone could trust the Reids after all the things they've been wrong(or lied) about.
-with the 43-101....its nice SORO officially has 650k payable ounces remaining in their defined envelope.
-analysts aren't the ones providing the market with lofty estimates. For three years running, the Reids fail to meet their own guidance by significant amounts.
2010.... 75% miss
2011.... $40 million miss (27%)
2012....potential $60 million miss (29%)
2013....estimates knocked down 17 months in advance...20k ounces so far
The trend I see is that Reid misses cost the company more each year
Investors need to ask the question....Are the Reids too ambitious or just incompetent?
-I particularly love the "gold is money" arguement. Anyone who has taken delivery of SORO coins has less value than those who chose fiat currency. You'll see how their PM stock piled treasury is doing next earnings release. When a company needs to rely on gimmicks to get noticed....well....you are seeing the after effects in the market now.
My one recommendation to you hard corp goldbugs planning on the end of the world.....first, and the most obvious, find an investment vehicle that actually has a significant gold component. Losing silver ounces to create a pretend gold ounce....there has to be a better way.
KS-this is why
"But also we're looking to do a resource report to the standards of the Canadian NI 43-101, with a view of possibly applying for a secondary listing in Canada. "
need money to buy bullion to mint Gold Resource coins to give to investors...They will be great souvenirs when the company is no longer.
This is worse than a poorly run company, it's too good to be true.
Engy, You could be right. If so, they have fooled Hochschild, Tocqeville, Blackrock, etc. Hoch may not approve of Mgmt today but, they did approve of this resource to begin with. They put their money where their mouth is...and this is their very area of expertise. You suggest that the Reids only sold a fraction of their stock due to the Barron's/ Sweeper expose. In effect you are then approving and blessing a series of apparent and acknowledged hatchet jobs.
Hey keep shorting, GREAT CALL (I believe you mentioned shorting GORO on a different board-had me look them up myself).
I'm a gold bug, but this company looks way too fishy. Not sure why Tocqueville hadn't sold earlier. John Hathaway lives in Colorado, so it might not be arm's length, the relationship.
Clip on tie auditors, fishy financial statements. wow...
<<Engy, i am not going to challenge you on the scenario that you have suggested! Surprised??>>
May I infer from the above, Sam, that you believe there may be precious metals elsewhere on the properties, but ascertaining any additional value to the company is suspect until it happens? ie, we have to trust management's bullish staements?
<<However, I would appreciate your comments as to the relative little in stock holdings that the Reids have sold to date. someting like 94% left to go? >>
How much do you have invested in this stock, Sam? Is it more than $52K?
If so, then you have more of your own funds invested in this stock than ALL of the Reids do.
That is correct, you read that right, $52 THOUSAND invested.
Now, they have somewhere in the area of $82M (that's MILLION) in share value (excluding their stock options) at this lowered price, after their almost $40M drop in value on Friday.
With a float of only 33M shs, when would you have have sold if you were them, Sam?
We know that legally they have been precluded from selling while they were in possession of the results of that report which they said would be out by year end.
So, I believe it is a safe assumption, that since year-end they have been privately protesting the results of the PAH 43-101. They would be precluded to sell stock through this entire period.
The Barrons article in mid-year 2011 put a big magnifying glass on management credibility issues and they have since been watched like a hawk. With such a small float and that watchful eye, do you think it would be prudent to be dumping even a few hundered thousand shares to put your other, say, 5M shares in jeopardy?
So, to answer your question more directly, I believe if the Reids had to have done it all over again they would have sold significantly more shares when they did last year when the price was in the high 20's.
They have bungled quite a few things regarding this company, including its reception from Wall Street in the last year, which has been basically non-existent. And I mean the real Wall Street, not the back alley, Doody/Stansberry pumpers.
What makes you think that their current position is not the result of the same financial mismanagement?
Engy, i am not going to challenge you on the scenario that you have suggested! Surprised?? However, I would appreciate your comments as to the relative little in stock holdings that the Reids have sold to date. someting like 94% left to go?
Or better stated and in a nutshell, why don't you proffer the case for the higher valuation. Where's the gold/silvwer? How much? After costs, taxes, royalties, etc why does it beg for a higher stock price?
<<Your new math suggests that any new drilling from here on out will come up as zero.>>
Sam, I believe that you are looking at the issue with an overly narrow focus.
ie, should there be even one ounce of gold over at Las Margheritas, for example, or ten ounces of silver just another 500 meters below the depth of the PAH report, then there is more value to this stock than the last quote.
I don't believe that I am telling any tales out of school when I say that we are dealing with a very promotional manegement here (wouldn't you agree?).
Certainly a management like this would go, FIRST, straight to development in their most productive and profitable resource geography (open pit and La Arista) before mining other properties; ie, we are seeing as good as it gets when it comes to grades right now.
Management may now hold a carrot out in front of what Natasha calls the Cult Following, and those "cultists" will respond as you have.
But the fact of the matter is that drilling in new areas does NOT have to come up snake-eyes to be a loser.
You've got increasing mining costs as you go deeper at La Arista (witness the cost of the new trucking fleet), cost of road development outside the immediate mill area, continued higher SG&A as we have seen in the last 4 quarters, negative cash flows draining the Treasury, etc, etc.
So, the "hey, we've got more stuff over there" feed that you will hear from management, while it may gain traction in the cult neighborhood, it is really all "on the come".
There is no certainty to it. You've got to trust management.
And there is no after-cost, after-tax, after-royalty substance to it.
Have you taken your dream scenario, as told by management, cost-affected it on a present value basis, and then discounted it for a poor credibility factor?
Essentially you are beholden to taking this management's word on the future. And from your response, I see that you have.
That is certainly your prerogative, Sam. But it does not translate to a higher valuation for this stock. Thusfar, the short-sellers, distrustful of management, have been the financial winners here in the last two years. Again, that is after we are very deep into the best-foot-forward mine under GORO ownership, La Arista.