AlexI have been in NMG and given up on them after making large...

Alex

I have been in NMG and given up on them after making large losses for me (around 20% of investment).

NMG is cheap for a number of reasons

1. suspect management who consistently fail to deliver
2. main deposit is between 50-200 metres under overburden that will cost $40m to clear
3. In clearing the overburden at main pit, I have been told informally by an industry expert (not from NMG) that they will need to shift 3,000 villagers and the cost per person can be $10,000 - ie an extra $30m will need to be found (possibly from current mining operations)
4. It will take about 2 years before they access the ore in the main pit and all current income will be eaten up in running the operations, moving villagers, clearing the overburden;
5. NMG is a bet that current management can fund themselves long enough to achieve point 4, or they find another significant deposit - if they run out of ore before achieving this then they could be in ore trouble
6. NMG being in Ghana face higher taxes than what exists in BF - note the Ghana govt wants to raise tax rate and change depreciation provisions on goldies;

I am not an expert on GRY and have not held shares in it, but it has a lot going for it:
1. Lower tax rate
2. higher grade
3. plenty of cash on hand
4. I understand the deposits are relatively shallower - but this needs to be checked
5. their proposal is for 200k ounce pa plant versus 150k ounces by NMG (which they will only reach if they can find higher grade ore than what is currently being processed.

These are some consideration. No doubt there are others.

I do not like GRY running around with too many projects on the go when they are not income positive. I hope they have sold out of PIR at a profit, because PIR is not necessarily going to be a money earner for them in the short/medium term.

DnD recently told its followers to take profits on GRY in the light of the risk-off market. This is the worst time of the year to do this - the sell in May and go away syndrome is in play.

The POG could head down further, perhaps to $1400, while deflation takes hold until there is more money printing in US/Europe. The Indians have been holding back on buying gold and the individual Chinese tend to buy when inflation and the POG are heading up.

Finally, I expect that there will be shorting of the goldies in the light of the weak market, just like last year.

Just my opinion, which is mostly wrong.

loki