Yes, looks like I could have paid a little less than I did if I...

Yes, looks like I could have paid a little less than I did if I was more patient...

I may have bought cheaper on Monday but Friday often seems to end up being a good time to buy - even if a little risky. I am still comfortable with my average buy price as i was buying for as low as $2.64 about a week ago...

Share price may depend on what happens to gold in the coming days/ weeks. Who knows - Jvegas describes the gold market well - "nervous"

But to make the point I made in another post - how often do institutions make very BIG mistakes in their due diligence when they invest in companies like OGC?

Some insto guys thought it was ok to pay an 8.29% "discount" of only AU $3.54 a share for around AU $190 million worth of OGC shares - that was only 4 months ago...

Gold has dropped no more than 8% from its all time high to its most recent low. OGC dropped first to a low of $2.50 (on 8th Jan '11)and has since recovered to close at 2.86 today...

$2.86 is still about 20% down from what the insto's paid when they thought they were buying "cheap" back in October 2010 - at AU$3.54 a share...

Did they pay too much for OGC??...

If they overpaid then OGC management did well to take $181 million of their cash off them...OR does the "smart money" still expect the OGC share price to exceed $3.54 in coming months/ year

Here are a couple of reminders of what the "smart money" thought was a "cheap" price for their OGC shares 4 months ago.

This was the 6 October 2010 book build - $115 CDN dollars was raised at $3.54:

"The Offering is being privately placed with investors in Australia, Canada and internationally at an Offering
price of CDN$3.50 (AUD$3.54), representing a 8.85% discount to last close on the TSX of CDN$3.84 and a
8.29% discount to last close (4 October 2010) on ASX of AUD$3.86. The Offering is expected to settle on
or about 20 October 2010 and the CDIs will be freely tradable on the ASX the following business day".

This is the October 20th announcement where $74 million was raised at $3.54:

The Company has issued 12,023,360 Special Warrants at a price of C$3.50 per Special Warrant for gross proceeds of
C$42,081,760 and has also issued 20,976,640 CDIs at A$3.54 (the Australian dollar equivalent of C$3.50
at the time of announcement on 4 October, 2010) for gross proceeds of A$74,257,305.

As small shareholders without access to as much information or high frequency trading programs it is easy to get "nervous" about the massive price volatility we have seen. We are only human after all but please spare a thought for the "smart money" - they are still 20% down... :-)

I sold out of most of my OGC shares at a loss on the way down but have bought them all back now for a much lower average price...