confused, page-41

Hello z and rowingboat,

These posts are like emails - so few words; and not a conversation. No dialogue to fully understand where somebody is coming from. I provided a snapshot of now for TGZ that is all. Perhaps i could do a look forward on them in the TGZ thread but my time on HC has to be limited to snapshots as well. Maybe for members a better option. You hold this stock this is plain to see, I mean't nothing against TGZ whatsoever.

TGZ has production of 36,695 oz for December quarter and are expanding like FML so all quite "similar" and for goodness sake don't take that as all inclusive. Ditto for the other points I make below. TGZ are growing to $210 - 225k oz similar to FML at present too.

Their gold sold 34,665 oz and total cash cost was $902, lower than FML, higher than expected - however gold sold was only US$1482 per oz because of a large negative hedge - FML has none.

They still have 174,500 oz to deliver at US$826 per ounce on the hedge, and chose to delay some of this during their expansion to avoid a cash flow shortfall. They also have covenant restrictions pursuant to the gold hedging commitments with Macquarie Bank. FML has no such issue.

Their debt is $24.4M and FML has none. They operate in Senegal West Africa. Mill expansion is set to be complete in this quarter and costs will reduce so the timing is looking pretty good for a turn around on TGZ, same as FML IMO.

The TGZ debt is not a problem however I view the hedge as a negative with a mark to market loss of approx $161M at present. When do they take that pain with a capital raising to fully expose themselves to the rising price of gold? Or do they ride it out for years to deliver at 8k oz per quarter or increase it? Somehow it has to be managed and is a negative.

The market cap is around $600M as you say, thank you was going off the quarterly and had not reached my next level of interest as yet on TGZ, and the market is LOOKING FORWARD to place this value on the stock or alternatively the market view on FML is wrong. Is this just the TSX valuation differential or the negative image of the CRE purchase?

FML needs to sell their forward picture much better IMO - what can they get costs down to at The Mount and at Laverton in coming quarters? TGZ a great stock but also operating in a more difficult political and geographic setting. If they achieve the cash costs they are promoting (with disclaimers as per industry standards) then the value is easy to see and entirely appropriate.

FML could be producing up to 55k oz this quarter and their lack of hedge will ensure the margin will be excellent. Unit costs will fall at Laverton significantly enforcing the trend now starting IMO. As Cbrian stated, sorry might have been someone else, give them time to sort this. Both stocks will do well over time IMO.

Just a few thoughts - to justify my thinking - and read this carefully so you understand where I was coming from please - on the current relative values of both stocks. Pro and con in either direction, not fully inclusive this is not a 20 page report.

I will take a closer look at TGZ now however so thank you for your comments they are appreciated rb and z. This is HC working at its best. I will also say that we all have real capital invested in these stocks and it is a mine field to talk about them in HC at times.

Do well and best regards,
CW
DYOR&DD