a gold story

some interesting extracts from a newsletter

"Apart from the atrocious share prices, the Australian Gold Industry is in turmoil. We have recently seen a number of small-mid caps go into voluntary administration and some are now struggling to raise capital to survive. With rising labour costs, a lack of virgin discoveries there is now an opportunity for a brave company to lead our gold industry out of the quicksand. One MD has recently commented to me that he is being offered RC drilling rigs that were previously fully booked out, because companies are now conserving cash rather than drilling holes."

"The Australian speculative market is the cheapest I have ever seen. The last time I saw value that could compare to the current climate was back in March 2005. There are companies that I know have the potential to increase 3 to even 5X in value on their existing asset bases, yet the market is not interested. This market reminds me of Perth real estate where you could buy a house on a double block, 4km from the CBD for $165,000 only 6-7 years ago. The same land would now fetch $1m and would still rates as a developers dream."

Full story available;

http://www.gold-eagle.com/gold_digest_08/locantro021308.html