maximum gold leverage

Worth Huntley's 33c or multiples of its current share price?

There seems to be such an enormous amount of bagging regarding LHG at the moment - a contrarian's dream, that I thought it time to explain to a few short term investors why LHG seems so over priced.

LHG has hedging representing 50% production for the next three years, has made little no, or negative return reaching into the distant past and has production problems affecting bottom line what seems to be quite often.Until recently when a huge inverse head & shoulders pattern nine months in the make appeared and a testing of the breakout of the 200MA line, these factors shouted short term LHG looked like a go nowhere fast or gown down fast stock.

Longer term, however, LHG blazes BUY, if gold is heading higher - here's why...

Lihr has 25+ million ounces reserve and 40+ million ounce resource, yet its market cap is 1.6 billion! There are countless stocks with a 10th of the gold in the ground that approach this valuation.

But it doesn't make money on that gold you say...
Not yet. But if gold goes much higher, Lihr's paltry profit will go up much,much more in percentage terms than most other gold stocks. This massive percentage increase in profit, coupled with massive reserves (and subsequent upgrades, as well as a massive mine life will see Lihr stock at unimaginable levels.

Lihr is looking at building this wealth long term through their strategies, strategies that have come under fire but are in fact quite prudent.
For example, the 11% of reserve hedging to be paid over three years ensures that if there were an unexpected large drop in the gold price short term, Lihr would not go under, unlike many purely unhedged. Short term they are still fully exposed 350,000 ounces per year, reaching full production amount end 2006.
To counteract rising fuel prices before they even really got started, Lihr embarked on a geothermal power plant that will reduce fuel costs significantly.
During the lean years of the gold price, Lihr resisted mining higher grade ore, despite flack from investors, so that this ore could be mined during much higher prices.

If the gold price does not head north, then Huntleys and their 33c is a good call. If Gold really does head north, this "dog" will give Huntleys the biggest bite on the bum they've ever had.