Abandon Hope All Ye. . .
In Dante’s “Devine Comedy” the entrance to hell was marked with a sign saying, “Abandon Hope All Ye Who Enter Here.”
For the ten or fifteen people who actually understand what is happening in Greece, the writing is literally on the wall. As of Tuesday September 13, the Greek 1-year note is returning 135.77%. In other words, Greece is not about to default, Greece has defaulted. Don’t bother looking for anything about it on TV or in the news, it doesn’t count.
For months I have been warning of the dangers of a default in the Euro system. It’s here. As usual, governments involved are clueless as to how to react. The problem is simple. Governments all want to spend more money than they have. Since all currencies are backed by nothing but paper, the printing presses have been rolling 24/7. But the illusion of unlimited wealth has created a problem where everyone - governments and consumers - felt they could borrow their way to fortune.
So we have far more debt than can ever be paid. The Greeks got it first. Actually they don’t have any issue with owing more than they can pay, they simply want the Germans to pay it. Great idea but maybe they should have passed it by the Germans first.
For the 100th time on this site, there is $600 trillion in derivatives. That’s almost $100,000 per man, woman and child on earth. The world economy is only $60 trillion per year; it can’t possible support ten times that much in derivatives. Derivatives are bets and while many people think of the bets as being off setting, a zero sum game, when you lose a trillion dollars, you stop paying your other obligations and the debt default cascades.
We are there now and the market recognizes it even if investors and most financial writers don’t. Many market indicators are flashing red and are indicating worse conditions than in Sep/Oct of 2008.
As I said months ago, one of the safest investments you can hold right now is cash. Good old, US dollars. The gold bugs will hate that but when markets are in turmoil, big investors seek a safe haven. If you think you are smarter than the market and can invest wisely with gold up $70 one day and down $70 the next day, good luck with that program.
I think we are due a monster event shortly and markets are going to tank. It’s an opinion but bad things are happening and no one can guess the ultimate end or when.
Saving cash for a good moment to buy may be a very safe and sane investment plan. I see the end of October being a lot safer than between now and then.
I was in Colombia a couple of weeks ago. It is my favorite mining jurisdiction in the world. It will be the biggest gold producer in the world just as soon as they can get all the potential mines permitted and equipped. It is gold mining heaven.
The company I met with is called Solvista Gold Corporation (SVV-V). I met with Miller O’Prey, the company President and CEO. Solvista has a short but interesting history. It was founded as a result of a joint venture between Norvista and Bullet Holding Group where Bullet Group vended two major projects into the company.
Norvista is the merchant bank founded by the famed Gerry McCarvill of Desert Sun Mining, Consolidated Thompson Iron and IAMGold background. Gerry McCarvill has proved to be one of the savviest mining investors in Canada.
Likewise Bob Allen of the Bullet Group has been picking up mining projects in Colombia since 1984. He is a major shareholder in Continental Gold and other major gold mining companies in Colombia.
In 2010 Bullet Group vended two nice gold projects into Solvista, the Caramanta Project 120km south of Medellin and the Guadalupe Project some 110km north of Medellin in Antioquia.
The Caramanta project has some 60,00 HA under their control with a variety of interesting targets. Solvista is in the midst of a Phase 1 exploration program doing mapping, stream sediments, soil geochem and geophysics over the best targets.
Miller O’Prey hopes to be drilling anomalies by either late this year or early next year in a Phase 2 program.
The Caramanta project sits in the middle of the Middle Cauca Belt. The targets are similar gold/copper porphyries to those already found in the same belt and nearby by Sunward Resources, Colombia Crest and Bellhaven.
Sunward just announced a blistering 11.4 million ounce gold equivalent resource based on a total 70,000 meters of drilling. In addition Bellhaven announced a new 43-101 on Sept 13th showing 1.6 million ounces of gold equivalent based on 7884 meters of drilling. Their grade of .77 g/t gold and .31% copper would make for $72 rock in the ground.
The Middle Cauca Belt is home to a number of junior mining companies all going after giant gold/copper porphyries. I suspect that at the end of the day, they are going to find similar deposits with similar drilling programs. Certainly to define 1.6 million ounces of gold equivalent for less than 8000 meters of drilling is brilliant and the shares of Bellhaven gained 28% on the day.
Solvista is well cashed up. As part of the Joint Venture, Norvista managed to raise $15,000,000 at $.75 a share and Kinross approached the company and injected an additional $2.7 million into the company for a 9.9% share at the same price. Those placements carried a ½ warrant at $1.10 so the warrants are none-dilutive.
The primary project that Miller is advancing most rapidly is the Guadalupe gold project about 120km north of Medellin. It’s a 70,000 square ha project with a number of historical workings. Phase 1 is your typical steam sediments, soil geochem and geophysics to prepare a drill plan for Phase 2 to commence drilling in the 4th quarter.
To the extent that Solvista is still a very early stage gold exploration company is pretty obvious. They are in elephant country however and either or both projects have company-making potential. I am very familiar with the gold/copper porphyry story in the Middle Cauca Belt and my opinion is that there are half a dozen companies who will end up with multi-million ounce deposits.
There is the downside of them not necessarily being high-grade systems but the belt has every appearance of hosting a number of potential company-making deposits.
I’ve known Miller O’Prey for several years now going back to when I first started dealing with Bob Allen of the Bullet Group. Miller was my contact there. I think it’s a brilliant move by both Norvista and the Bullet Group putting him in as CEO. He’s young, bright and energetic. He is just what Solvista needs and he’s just what Colombia needs.
To the extent that Solvista is an advertiser on 321gold, I am biased. I am very nervous about the general market for juniors and until the mess in Europe is sorted out, I think right now is a dangerous time to invest in anything. But Solvista has solid management, good projects and they happen to both be in the best department in Colombia for mining, Antioquia.
Investors are reminded that they alone are responsible for their investment decisions. The company has a good website and is excellent at communication and I encourage any potential investor to contact the company with any questions.
Solvista Gold Corp