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Date Posted: 14:18:01 07/11/03 Fri
Author: siempre
Subject: as posted at Kitco

siempre33 (good goldstox, bad goldstox) ID#147464:
Copyright © 2002 siempre33/Kitco Inc. All rights reserved
A low price does not a good stock make.
To prove my point I looked at two low-priced
golds, Caledonia & Queenstake, and then at
two somewhat higher priced ones: Seabridge
& Northern Dynasty.

My main thrust was to find how much gold-in-
the-ground you
would purchase by buying one share of the
company's stock.
While there are many other considerations when
analyzing any stock, for goldstox this would
seem to be right up there with good management.

In fact, it might be considered to be an indication of good management, as it signals
a company's ability to build
wealth for their shareholders. Some companies
are simply better at doing this than others.

Caledonia ( CAL ) sells for about 28 cents [Cdn]
and has a gold resource of 2,489,000 ounces.
[yes, I know they have potential other
resources] But they have sacrificed value by
issuing shares to the tune of 248,298,436,
much of this in the last year, in order to
grow the company. So what do you get for your
28 cents when you buy a share of CAL?
Well, you get well under a gram of gold--
about $3.45 worth [US].

Queenstake--QRL--is very similar to CAL,
selling for about 32 cents & having shares
outstanding of 244,298,243, which just
increased 222.4% with a new financing;
talk about dilution!
With a resource
of 2,497,000, including newly acquired
Jerritt Canyon, one share gets you $3.52
worth of gold.

Now we take a huge leap over to Seabridge
Gold--SEA--which is around 2.00 & has
measured & indicated resources of 8,739,000
ounces of gold, with 26,561,185 shares out.
Here we find an ounce of gold-in-the-ground
is worth over $113 with the purchase one
share of common stock; some difference, eh...

Finally, let's take a look at Northern Dynasty
--NDM--selling for around 1.22, with estimated
resources of 13,200,000 ounces of gold [plus
a lot of copper, molybdenum, etc.] & shares out
of 26,800,000 currently [this will be diluted
with a financing shortly]. With NDM your share
buys an astounding $169 worth of gold, or
nearly a half ounce.

I only know of one company offering more value,
where you get .52 ounces of gold per share.
Goldeye, mugwump & a few others know which
one I'm talking about.
Leverage is what you're looking for, for most,
in buying a goldstock. In buying the best
value, you also get maximum leverage to the
price of gold.

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