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Gene Arensberg: Divergence between gold and junior shares is contrarian's delight
4:40p ET Sunday, August 12, 2012
Dear Friend of GATA and Gold:
At the Got Gold Report, Gene Arensberg has posted in the clear his new analysis of junior gold and silver mining stocks, which have been nearly destroyed over the last couple of years but which, Arensberg finds, are showing signs of life. The divergence between the price of gold and the price of the juniors is now so great, Arensberg says, that contrarians should be springing into action. Arensberg writes of the chart of the Canadian Venture Exchange, home of many juniors:
"The chart just above is the kind of chart that makes a contrarian salivate with great anticipation. Consider that prior to the Lehman collapse the CDNX traded at a multiple of the price of gold -- up to five times the gold price. Today it has fallen all the way to less than .75 times the price of gold. Simply amazing volatility on display in the chart above. And contrarians know that volatility works in both directions. The market first creates, or rather, is driven into huge divergences and gargantuan imbalances -- which it abhors -- and then gets busy correcting them, given enough time and patience. For many gamers it is the pace or frequency and the amplitude (size) of the giant moves that are out of phase with their own tolerances and psychology/comfort levels -- so they end up missing them completely."
Arensberg's commentary is headlined "Vulture Bargain Update Notes for August-September 2012 -- Seller Exhaustion" and it's posted at the Got Gold Report here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment:
38% Pre-Tax IRR, $3.0 Billion NPV, and a 37-Year Mine Life
Company Press Release
VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory.
The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57.
The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows:
Payback period: 3.55 years
Initial capital investment: $863 million
IRR pre-tax (100% equity): 38 percent
NPV pre-tax (8% discount): $3 billion
Mine life: 37 years
Total mill feed: 405.3 million tonnes
Mill throughput: 32,000 tonnes per day
Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics."
For the complete press release, please visit:
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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters
From a Company Press Release
November 22, 2011
VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.
"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."
Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.
For the company's complete press release, please visit: