150% resource upgrade for malbec

After the market closed today, GTM announced a 150% resource upgrade for its Malbec gold deposit, reporting that 'the resource is still open downplunge to the east and west.'

The question is whether this good news will be sufficient to arrest the share price decline we've seen in recent weeks. I took a punt this morning that management would serve up something juicy to the Diggers and Dealers conference at Kalgoorlie this evening and picked up another 260k at .073 cents on spec. Regardless of the market's immediate reaction tomorrow, I'm comfortable with the price paid looking ahead to the medium term.

GTM's share price has suffered along with the gold sector generally but it has a very prudent hedge in place (A$595 / oz for the first 75,000 ozs) and has the useful option of feeding ore in from Malbec and Edna Beryl to take advantage of any increases in the spot price.

With aggressive drilling underway, very high grades being discovered, production increasing at reduced cost (thanks to better stoping methods) and the options overhang out of the way, I'm betting that the worst is behind - unless of course the POG tumbles again.

I also like the copper diversification strategy very much and hope it proves viable for its obvious benefits of reduced vulnerability to a single resource.

Relative to other juniors in the gold sector, GTM is very attractively priced IMO. It now has strong cashflow and a continually improving mine life with extremely rich ore bodies.

I hold a heap so conduct your own research and draw your own independent conclusions.

Gupper