gul & central iron & barrick, page-3

JohnStocks, I see that you are one of us rare investors in GUL. I have held GUL shares for about 15 years, a decade and a half of too much promise and too little delivery. I am beginning to hope that those disappointing years will soon be over. With a bit of luck Friday’s 31% rise may be start of new beginnings.

My reasons for cautious optimism are:
1. GUL’s market cap is $13m and as at June 30 GUL had cash and cash equivalents of $9m. This means the market values all the other assets at only $4m. So, nothing much baked into this cake yet.

CIO (GUL 36.1%)
1. The gold intersections announced for the Endeavour Project on Friday were real quality. 4 meters at 50 grams is definitely not a fluke.
2. Exploration is continuing over these few weeks. This means we should have some more results, at the latest in January. Who knows, some of these may be even better than the last ones?
3. CIO does not have much cash at present but it is about to received $3.0m from the sale of the Eureka gold project. Hopefully this money will be used to accelerate the various exploration projects. If CIO is short on cash, perhaps GUL could increase its holding?
4. Acquiring 51% of the Barrack JV area for $450k seems remarkably cheap to me. As does $200k to acquire a further 19%.
5. They already have a mining lease on this prospect and the discoveries so far are quite shallow, which means if they can find a bit more, mining could shortly become a realistic way forward.
6. Even though the company has had some early success with its gold interests, these are not their main focus, iron ore is. Although progress has been slower than expected on this front, with only two exploration holes being sunk so far, the enticing goal of between 510MT and 850Mt of iron ore remains.

Cheers

K