disapointment

The dissapointing thing about LGL is the extent of its fall in price. If one looks at "GOLD" (ASX) the price hasn't really moved that much in A$ terms. Thus I read a signicant fall in the price of LGL as a fall in market confidence and this is consistent with the broker valuation of $3.00 or per share. Jim Sinclair believes gold is headed for $1050 and $1600 (USA pesos)and if he is right then LGL should recover somewhat.

The last release from LGL is that forecast production is down for a number of reasons, one of which is the hardness of the ore and the need to add low grade material to keep up mill feed. Normally metallurgical studies on the ore are carried out long before mining operations begin and if the "hard" ore has come as a suprise then this sends shivers up my spine regarding the competance of management. Maybe I am unjust but I find it hard to beleive that an apparently unexpected 12.5% reduction in production (from 800,000 oz to 700,000) could not have been forecast during mine planning operations.

I made a mistake in buying into LGL. That's my fault. But on any rise I'll move into physical gold where the Perth mint has a $2.00 - 3.00 per oz spread on paper gold.

my interpretation is that we are now on the down leg of a Kondratiev cycle (look on the internet if you need to refresh your memory what this is) and Kondratiev says that on the down leg one should be in gold or cash. I don't entirely believe this but now is the time to hedge ones bets.