I found a really nice Yahoo private message board for Gold Resource Corp (GORO.OB) investors. Leave me a comment (where I pick up your email address) if you'd like an invite. There are no bashers. There's a lot of good in-depth information. There's too much enthusiasm.
Someone asked what it was about GORO.OB that sets them apart from the rest. Here's my answer. I'm pretty breathless (don't you think)? Do your own due-diligence. Remember that there are good reasons you don't want to invest like me.
"The thing that really separates GORO.OB from the pack is the targeting of significant dividends. The method of skipping NI43-101 "official" resource definition and going straight to production is also pretty unique. I think they are "good", but they are also lucky. The property is better than they could have expected. The lack of an NI43-101 leaves this as a "hidden asset" which makes GORO.OB a hidden asset play. The dividend target makes it a straight ahead value play. The low cash cost also provides a big margin of safety against falling metal prices.
I've only been in mining Jrs since 2006, but from my experience there:
o have been other companies that found really great deposits and had their stocks sky-rocket (e.g. Hathor (HAT.V) found a really great uranium deposit, Noront (NOT.V) found a spectacular nickel with lots of other byproduct metals). GORO has excellent drill holes with more to come, but has production coming.
o were a bunch of base-metal companies going into production targeting equivalent profits at current prices (e.g. Tamerlane Ventures (TAM.V), CML.V, SRS.TO, etc.) but then base metal prices went down and they never delivered those profits. They never talked about dividends. They also didn't have low enough cash costs to survive a metal price downturn. GORO is different. Its ore is so rich it can make decent profits even when 3/4s the gold miners out there are losing money.
I'd say the closes thing I've seen to GORO.OB is SanGold resources (SGR.TO) which was a struggling gold mine reopener (losing money, diluting all the way) which got lucky and found a truly excellent deposit right next to their mine). Their stock has more than tripled, but they still aren't making profits yet. The news letter writers were all over that one (Jay Taylor and a bunch of other ones). The stockhouse message board was a mess (with endless pumping and bashing). I stayed away because I didn't like the soap opera. Should have bought because it has tripled since I started watching it. SGR.TO has great rocks, has production, but... even they aren't talking dividends.
If Jay Taylor and a few others jump on board, GORO.OB could see a double just from their pumping. I would think that they would wait until the right time (going into production or waiting for first quarter results with proven / probable reserves on the way with an AMEX listing to follow or something).
Troy Resources has not promised, but delivered and is delivering dividends. But its rocks are not as good as GORO's and they don't have the exploration upside. So again, GORO.OB seems to be unique.
I've got something like 40% of my retirement savings in GORO.OB at this point, so I'm a true-believer. I believe management is great at promoting (isn't that web presentation fabulous?), but that they consistently over-promise on schedule (which cost us that last dilution). As a result, I'm kind of expecting the 2011 limit on Hochschild to bite us leaving us without having produced anywhere close to the targeted first year oz. Getting a mine started and producing properly is hard and most companies have hiccups that cost them a couple of quarters.
Exiting when production is announced and reentering after the first round of problems is usually a good strategy. A 30 or 40% hit is not unusual when the problems show up. I don't expect trade out and back in with GORO.OB because the stock is so illiquid that I'm afraid I won't be able to build up the kind of position I currently have.
I think startup problems could easily happen here. That may let Hoch get control before the stock hits the targets this board is expecting. But if GORO can get some production going, get some genuine SEC approved proven-probable reserves (with lots more coming) and an AMEX listing I expect we'll see a double before that Jan 2011 limitation falls off and releases Hochschild to buy more than 40% and gain control of the company.
Having Hochschild sitting waiting to buy this stock is not really a bad thing. It already got us a double. It should support the stock price going forward. The start of production and more exploration results should also push the price up.
But getting on the AMEX, where the story can be pumped to all those USA investors will be a really big stock price driver. GORO.OB could be a gold stock that a bunch of non-goldbug news letter writers pump to show that they are hip to the gold bull market. The AMEX listing is crucial. Its probably worth a double in and of itself. Its the reason why I think Minefinders (MFN/MFL.TO) has roughly double the P/E ratio of its comparables. To get an AMEX listing, GORO has to get into production and get proven / probable reserves.
Hope this is helpful (sorry for rambling),
MontyHigh"
I've been taking some friendly comments to heart. 40% is too high a concentration for this type of stock. I've been lightening and will continue to lighten for a while, I expect.
Posted by: MontyHigh | October 26, 2009 at 09:32 AM
I just saw that San Gold (SGR.V) announced the discovery of a new high grade gold zone at its Rice Lake Mine in a story at http://www.goldalert.com/ that provides news and analysis on the discovery. The company said that this grade is unique and hasn't been seen before by any operators at the mine. I think this news just adds further appeal to the company, which offers a lot of leverage to the gold price. Its stock has performed very well this year, and I expect it to continue due to all the bullish fundamentals for gold, particularly the Fed's easy monetary policies to try to prevent any sort of deflation from occurring.
Posted by: mthomas | October 21, 2009 at 10:31 AM
I took a small position (since increased) in February after seeing a compelling presentation at Proactive Investors in the UK.
GORO sound really close to production - but there's many a slip...
If
1) They do get into production in the next few months
2) Their (low) estimates for the cost of production hold out
3) The gold price stays close to where it is at present
then I'd expect the share price to double when production is confirmed, with further upside potential. But that's quite a few ifs.
I'd like to join the message board, please.
Posted by: Romilly Cocking | October 20, 2009 at 10:29 AM
As for "Having Hochschild sitting waiting to buy this stock is not really a bad thing. It already got us a double. It should support the stock price going forward. The start of production and more exploration results should also push the price up. "
doesn't mean anything. remember the moris mine? that piece of sh** was sold a a tenth of what they bought it for.
also understand hochchild has the rep that they don't know what they are doing when it comes to mineral resources outside of their home country. so check that out too. is the resource formation like they ones they are used to?
Posted by: bill | October 18, 2009 at 02:08 PM
The 43-101 is a Canadian only report on resources, they actually cannot legally release a 43-101 as the SEC does not accept the resource definitions defined by that report. In the US mining co's can only report the equivalent of measured and proven. Not indicated or inferred.
None the less, the company should provide some indications of a feasibility study done by an outside firm. The reason is that there are a significant number of mining companies that go into production and then find out it is not financially feasible, or they just go ahead anyways because they know their stock will pop.
If I had 40% of my retirement in this stock I would hire a solid geologist and send him to the site to scope it out. Quite honestly, you are crazy to invest that much in a micro cap company with lax reporting requirements without getting an outside opinion. Due diligence people.
Posted by: bill | October 18, 2009 at 02:05 PM
Sorry, I am a novice trying to invest in gold mining company. What is the meaning of "N1 43-101" resource defintion you mentioned in the above post.
I also want to get an invite to Goro.OB private message board?
Thank you very much
Posted by: L Wong | October 18, 2009 at 10:29 AM
40% Wow you are a believer !!!!! I am too I had about 40% in, until I went 100% into USEG in wifes IRA.
GORO is still my largest positon overall.
Do you think GORO should of made a deal with SLW or Royal Gold intead of Hoc?
Wasn't Hoc called partner from hell by Rob Mcewen ?
Posted by: Rich | October 17, 2009 at 10:06 PM
Re: SGR.V "The stockhouse message board was a mess (with endless pumping and bashing). I stayed away because I didn't like the soap opera. "
Check out the message board Agora. They have an active board with some excellent posters.
Link: http://agoracom.com/ir/SanGold
-Alex
Posted by: Alexs_Pushkin | October 17, 2009 at 09:50 PM