Markets tend to range from one extreme of emotion to the opposite extreme of emotion. But as readers of various investment advisors we demand specific numbers as targets, so that's what the advisors provide us. In reality, just how valid is it for a pundit to say, "We think gold is going down to $312 but if it doesn't go down, it will go up."
No kidding. But what other alternatives are there? Gold either goes down or it goes up.
I don't pay a lot of attention to price predictions. I have followed various advisors for years and those who can predict accurate prices on a regular basis are rare indeed. In my experience, the most important factor affecting price is the psychology of investors. In January, bullishness on gold hit the stops, gold had rocketed from $320 to $390 in six weeks and wild predictions of gold well above $400 in days were common.
So gold promptly went down. It responds not to price predictions, only to emotion. We are hitting the stops in emotion towards gold again but in the opposite direction. Now no one wants gold, bullishness is at yearly lows. That means gold and the gold stocks should be going up. I won't give price predictions, I don't think they have much value. Buy until everyone wants to own gold, then sell.
Last August, I took an 8 day trip with Bill Henderson of Nevada Sunrise, LLC to inspect mining properties in Nevada. One of the mining camps we inspected was that of the Golden Arrow property, the flagship of Nevada Sunrise. A month ago, Nevada Sunrise and Pacific Ridge Exploration announced a deal whereby Pacific Ridge would acquire a 60% interest in the property in exchange for exploration expenditures of $6 million.
Pacific Ridge Exploration (PEX-V) is the exploration arm of the mining combination of John Brock and Wayne Roberts. This highly seasoned team with 68 years combined mining experience have put together a variety of successful mines in the past.
But finding money for mineral exploration at times is more important than the ability to find gold. If you can't advance a project, it doesn't matter how much gold it contains. John Brock has raised over $50 million in financing since 1994 in addition to finding productive mines all over the world.
Previous drilling at Golden Arrow proved resources of 480,000 ounces. These resources are subject to confirmation according to standards of 43-101 and will have to be resubmitted to the exchange but basically, there was a lot of mining at Golden Arrow in the past, and there is gold there now.
Pacific Ridge plans an aggressive $700,000 drill program starting this summer. Golden Arrow has a proven high grade vein system which has had little exploration outside the previous drilling. The property measures 6 square miles and shows mineralization up to 1.87 ounces per ton of gold over a 15 foot section.
Previous drilling of 267 holes revealed two different bulk tonnage zones called Gold Coin and Hidden Hill which represent only 10% of the overall target area of 5,000 feet by 15,000 feet. pacific Ridge intends to both extend the existing zones as well as adding additional high grade formations.
The real key to an investment in Pacific Ridge is their extremely low market cap. With the price at $.12 Canadian and 19.8 million shares outstanding, this impressive company has a total cap of only $2.4 million Canadian or $1.6 million US. That's not much. The stock has ranged up and down around $.10 a share and we consider it very attractive in the $.10 area.
Golden Arrow has a proven resource now and we expect drill results and geochem sampling to increase the resource in line with 43-101. Given that we believe gold is due for a strong advance on its own merits, now is a good time to consider adding investments in precious metals stocks.
With Pacific Ridge, you have a management team with substantial mining exploration experience, the ability to raise money when needed and a 1st class property with proven gold resourses and potential to the sky. When a company has all those assets and a tiny market cap, it has a great future, and IMO it's well worth investing in.
In 1967, I was in San Diego visiting a friend. I still recall walking past a coin dealer and seeing bright stacks of shiny $20 gold pieces in the window. With just under an ounce of gold in each coin, the dealer was selling them in any quantity for $38 apiece. By the time the war ended, gold rocketed to $200 an ounce.
When you hear baying of the dogs of war, buy gold. Or gold shares.
Pacific Ridge website
Pacific Ridge is an advertiser on 321gold and we own 150,000 shares purchased at $.10 a share.
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