now this is a joke

watso has previously been ordered by the court, to provide community service by way of providing reading material for all GDAelles. Indeed, it is almost a breach of the parole conditions that watso has not started a new thread for 1.5 weeks. watso is not in a hurry to return to the slammer, so he has searched far and wide to provide some reading material. first of all for the iron ore (from the iron ore thread, compliments of DGruzing)



Ore stockpiles in China full, demand slumping
March 3, 2009

Shanghai: Reports are emerging of capesizes sitting in long queues off China as Chinas stockpiles of iron ore reaching bursting point.

There are some 75 vessels waiting to discharge to the already choked ore terminals. The president of China's state-owned aluminium giant, Chinalco, has given a dour short-term forecast for commodities markets. There is no bottom seen here yet in terms of the economic situation globally,'' Xiong Weiping said in Sydney yesterday. The bleak current outlook for China's iron-ore demand also had to be seen against the backdrop of current price negotiations in which Chinese buyers are expected to win 30 per cent price reductions. In response to the slowing demand, iron-ore spot prices last week had their biggest drop since October, while iron-ore freight rates slumped 15-20 per cent. Analysts said the outlook for Chinese growth had changed for the worse in the past two weeks. After a period of steel mill destocking late last year, followed by a period of restocking this year, a truer picture of demand was emerging. Macquarie Bank analyst Jim Lennon this week reported that 75 iron-ore ships were waiting fully laden at anchor in China, up from 55 at the start of February, and the highest in more than two years. Source: Seatradeasia.

ok - that should take care of the iron ore mines that gda might find next week. so how does one value a gold explorer, as gda have that property called PARKER RANGE, where they have been scratching around for about 6 years. at least it is reasonably close to perth, and not far of the main road. mmm - watso found the following on the mxr thread,, and compliments of some poster who calls himself watso (heh is there a copycat watso, who speaks in the "third person", on the mxr threads?????)




a link from the kitco site was interesting

www.kitco.com/ind/Holmes/holmes_feb242009.html


which included the following


"Investors can improve their odds by learning how to assess the fundamentals of the gold exploration companies. A good tool for this job is what I call he Five M.

By using the Five M, an individual investor can build a simple but powerful model to initially sort through the many hundreds of upstart gold companies to find better opportunities.

1. MARKET CAP

If a junior gold company has 10 million shares outstanding at $1 per share, the company is valued at $10 million. The question any investor should ask is, s this company really worth $10 million?
If the market pays $25 per ounce of gold in the ground, the company should be valued at $25 million. If the company market cap is only $10 million, it may look undervalued. If the company market cap is $50 million, it may appear to be overvalued.

For larger gold companies, an investor can measure a company market cap against its production level, reserve assets, geographic location and other metrics to establish relative valuation.

2. MANAGEMENT

Often the heads of junior companies are geologists or engineers who have no relationships in the brokerage business. This lack of relationships impedes their ability to generate market support.

Some of the most successful company builders in the gold-mining industry are what I call the inancial engineerspeople who have the relationships and understand the capital markets and who know how to hire the best geological and engineering teams. We tend to have more confidence investing in them.

3. MONEY

A gold exploration company has to deliver reserves per share to have a chance at another round of financing. It has to convince the capital markets that it is an attractive investment on a per-share basis.

The gold-equities market is efficient at judging reserves per share, so if the exploration company doesn come up with the results necessary to get an evaluation, investors quickly lose confidence.

There is an old rule when it comes to exploration companies: dont pay more than two times cash per share if there are no proven assets in the ground.

etc"

.................

from the gold thread, and compliments of richard possum , was the following

Here's part of an interview of Frank Holmes on Goldseek:-

TGR: What criteria do you use to evaluate juniors?

FH: Unless they have two grams of gold (per ton) or a million ounces, junior explorers have been drifting lower and lower. Historically in situ reserves have traded at one-tenth of an ounce of gold. So, if gold is $600, then your reserves are worth $60 per ounce. When gold was $300, they were worth $30. That was the model for determining a fair market cap for junior explorers. With gold at $850, these companies should be worth $85 per ounce of reserves, but theyre not. This amazes us. And when one of these companies is bought out, its usually paid more than the ten times ratio. But valuations are now drifting down to $40 and $35 per ounce. So the market is basically valuing a company that has 8 million ounces as if it had only 4 million ounces.

TGR: This is a short-term phenomenon, right?

FH: Yes.

TGR: So, when this situation changes, how quickly will producers and majors start buying up the juniors?

FH: Thats a different point. The seniors are going to buy only those juniors that have two grams of gold per ton or a million ounces. The other juniors will just work their way out of the system or go bankrupt.

TGR: What other criteria do you use to evaluate juniors?


FH: We ask some simple questions: Is the CEO technically competent? That is, is he a geologist? If not, that may be okay, but does he have a broad network to make up for that lack of technical knowledge? Does he know the newsletter writers, like Doug Casey, for instance? Does he know the investment bankers?

Weve found that if the CEO does not know the Street, and doesnt know the newsletter writers, it doesnt matter if hes a geologist or an engineer. Theres going to be no liquidity in the companys stock, unless there is a multimillion-ounce discovery with a grade of greater than 2 grams per ton. But if you have a company whose CEO knows lots of newsletter writers, gets lots of coverage, knows the value in the Street and gets research for it, that company is going to have a higher price-to-book valuation, which makes it a much more attractive investment.

TGR: Anything else you look for?

FH: Financing is crucial. Companies that are rapidly spending money are going to run out of cash in about six months. The market undervalues them until they have financing in place

etc etc.

..............

so what is gda worth?????????

ok - watso has provided the reading material, and if only 10 people read the post, then watso does not go to the slammer