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Gold Resource Corp Message Board

engynear 2 posts  |  Last Activity: Aug 16, 2014 7:12 PM Member since: Aug 29, 2002
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  • Reply to

    A lot of gold

    by mars_in_scorpio Aug 11, 2014 1:56 AM
    engynear engynear Aug 16, 2014 7:12 PM Flag

    "If they can accomplish what they want, using less money ... that would be a good thing."

    Assuming that what management wants is beneficial to shareholders, then I would agree that accomplishing what they want is a good thing for you, "mars_in_scorpio"..

    Now let's take a look over the same time frame I gave you regarding their under-exploring of those properties that they told the shareholders were so rich in resources (and coincidentally what the independent consulting firm they hired concluded otherwise in June 2012).

    Let's analyze your premise over that time frame and see if management accomplished what they wanted.

    The following is their projection for production of gold equivalent ounces before the start of the year versus the actual ounces produced in the respective year:

    ………..........What Management Projected…...........….What Management Got
    2010…..............…………35,000 oz…………..…........…………10,493 oz
    3011…......…........……....90,000 oz……………........………..…66,159 oz
    2012…..............……… 140,000 oz……………........…………..90,432 oz
    2013……..............……..200,000 oz……………........…………..84,835 oz

    I agree that management accomplishing what they want, if it's in the shareholder interest is a good thing. But GORO management clearly and consistently does not accomplish what they want.

  • Reply to

    A lot of gold

    by mars_in_scorpio Aug 11, 2014 1:56 AM
    engynear engynear Aug 13, 2014 6:40 PM Flag

    "After looking over the geological reports on the GORO website ... there appears to be a lot of gold and other minerals in the area where the company's 6 gold mines are located."

    Hi "mars-in-scorpio".
    Did you happen to read the resource report from Pincock, Allen and Holt dated 7/10/2012? This will give you an idea of what is in the ground down there.
    Charlie Munger (Berkshire Hathaway) often says it can be instructive to pay attention to what a management does with your shareholder money rather than what it says it will do.
    He also defines "good management" as a management that "does what it says it is going to do",
    Regarding the "lot of gold and other minerals in the area" that you posit, let's go back and see how management orchestrated this "big resource" narrative at the beginning of each year.
    Below are the exploration budget numbers reported in the company's SEC filings alongside the actual exploration expenditures for those respective years. All numbers are as quoted from the respective filings (with the exception of the 2012 budget which was detailed in the Pincock ,Allen and Holt report that I mentioned)
    But let's look at what management wants you to believe and then what they actually allocated.
    ..........................................Budget.............................Actual
    2010......................................?..................................4.7M
    2011...................................6M..................................4.9M
    2012..................................10.4M..............................8.0M
    2013..................................11.8M..............................9.5M
    2014...................................8.1M.......................first 6 mos. 2.9M

    My question regarding the above numbers is: Why would past management and present management be so consistent about under-delivering on exploration activity on a property that is supposedly so rich in resource?

GORO
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