Hi Otakou,Are you from down Dunedin way? My wife’s a Balclutha...

Hi Otakou,

Are you from down Dunedin way? My wife’s a Balclutha chick but we couldn’t return there now due to the cold weather, Australia’s made us far too soft! Your post pretty much cuts to the chase. The only bit I disagree with is the potential market part. The nice thing about gold is it is universally accepted, the ultimate money, so producers don’t need to proactively find a market.

I would add that having a minable gold reserve is a huge deal; it means you effectively have an underground bank because the gold is economically extractable. Australia may be full of gold but some of our gold miners are dropping like flies and the major global gold producers are seeing their reserves and production rates collapse compared with a few yrs ago, despite higher gold prices.

So I think there is a lot of value to be gained for a gold explorer to increase its resources and reserves. CTO is trying to do this as well as add value by increasing production. In a few yrs I can see global gold production falling off a cliff at the same time as central banks are exhausting their sales programs. So these underground “gold banks” are going to be sought.

My investment style is to buy gold explorers that can organically self-fund their progress, minimising their reliance on the banks and major gold producers offering help. It’s quite incredible that we could now be witnessing a monumental shift in the Australian gold industry. SBM despite its grandiose talk is in real danger. The WA open pits are a dying breed. CTO is perfectly positioned to step up to the plate if it can deliver meaningful production in the next 12 months. But don’t discount the reserve announcements either which are just as important, if not more so I reckon.

Rowingboat.