I continue to be amazed at the prices of gold companies today. It really looks as if we had a major blowout last week with investors throwing out the baby with the bathwater. Gold is in excess of $1700 and silver in excess of $32 and resource investors are digging through dumpsters looking for rusty razor blades with which to slice their wrists. Are they nuts?
I got a call on Friday telling me about yet another absurdly priced gold stock, that of Moneta Porcupine (ME-T) with a market cap of about $37 million, a 43-101 resource of 4.29 million ounces, a PEA released two weeks ago showing a net present value of $748 million with a gold price of $1,350. If you use what is probably a more realistic figure for gold at $1,700, the NPV jumps to a blistering $1.5 billion. Why do I have this sneaking feeling that a market cap that is only 5% of NPV isn’t going to last long.
…..read more HERE
Increasingly bullish prospects of gold stocks
by Steve Saville
Despite the recent weakness we are becoming increasingly bullish about the prospects for gold stocks. Actually, it’s partly due to the recent weakness that we are becoming increasingly bullish, because the extension of the downward correction makes it more likely that the overall advance from the May low will last well into next year.
We had thought that the most likely alternative to the overall advance extending well into next year was an intermediate-term peak late this year. But with the corrective action that began in September having continued until the third week of November there is now almost no chance of an intermediate-term peak by year-end. The correction has been long enough and large enough to lay the foundation for a rally lasting at least a few months.
….read more HERE