gold turn around

We all love to knock a looser when its down ...

And when it comes to GBM we as shareholders all know about the difficult times the company has had to go through for the last 18 months with the GFC and subsequent withdrawal of the A10 mio credit line from the Asian Investment Company.

Through this the management have tried to bringthe company back to life when All the world capital markets dried up as cash became king!

Roll on 2010 and the management have now sucessfully attracted close to a$4.5 mio to kick start the companies gold producing potential of its Mawell mines along with repaying its creditors from the GBGM Operations Co that was put into Voluntary Liquidation.

I would have to say that todays announcement was very significant in the way that GBM procuced some 180 ounces of gold and more importantly said that it has hit breakeven for the month of June...... So no cash Burn !!!

Things that we should note

- AUD/Gold price over the last year has gone from A1000 to A1450 per ounce some 45% increase ...

- If GBM averages 180 oz per month then conservatively theannual producion should be 2500-3000 oz p.a or revenue of some A$3.5 mio

- At one stage GBM with 100 mio shares had a market cap of some A30m without producing any Gold BUT now that market cap is A$8 mio with Gold production started and increasing

- Management has recognised that there has been a communication problem and has now hired a communications manager to handle all correspondence to the market

- Key personnel have been hired on a contracted basis with substancial knowledge of the industry

Given the above I remain a long term holder of GBM and see the Market Cap back at A30m or some 10 cents per share over the next 6-12 months as the plant operators & site management hit their stride !!!