sprott outlook gold last night bloomberg, page-18

I think the concern is that AMX and GRY are both burning through their cash pretty quickly and the next time they come back to the market for money it will dilute existing holders very badly.

Obviously GRY are in a far stronger position being more advanced, having better drill results and average grades and not having an issue with complex metallurgy. GRY also has a significant sum it can call on by selling its PIR shares. But the fact that they ate up $15m in the last quarter was a bit of a worry. The way GRY tanked despite the recent excellent drill results shows how skittish the market is about companies without a cashflow, and even these have bleed a fair bit the last few days.

It might be worth getting into soon AMX for a bounce in the market into mid December, but after that the market tends to die down. Would you really be wanting to hold AMX next year given the economic headwinds out there? They are likely to need major new funding by end 2013. Hopefully they will have added to their resource and established a reserve to make them more attractive.

I might pick up a few AMX if they fall closer to 30 cents in the short term, or wait to mid 2013 when most goldies tank badly.

There is no point to taking excessive risk in this market, because the rewards are getting smaller. I am not convinced we will see POG 2000 until late 2013, while in the meantime there are constant issues about govt tax take, civil wars, cost escalations, worldwide economic stagnation with concurrent low officially reported inflation, reduced demand for gold in India and by private Chinese, a smaller impact of QE on markets, and concerns about the direction of many world sharemarkets (China, US, Europe, Japan).

loki