outlook on u308, page-11

Hi Macau,

Just concentrate on gold - it is "doing something special" but the punters are not yet on board.

1. At USD $ 600 oz (A$ 937 oz ) as the floor and cash costs of A$ 300 -400 oz gold is very profitable.

2. If the US $ tanks and the A $ does not rise as a result - and gold increaases in price - an even more compelling story.

3. If inflation cuts in and all other inputs remain about the same -even more compelling if gold tracks inflation .

The point is gold at current prices and exchange rates is highly profitable. So why aren't gold stocks running -because the hedge funds are waiting and Billy Blowfly has not caught on yet - remember when we were confounded with commodities increasing in price -and not junior explorer share prices -it was inexplicable - but it did happen eventually and BOOM. It will happen with gold - the hedge funds and then Mr Average Joe will run gold to the moon.

I am talking to a Chinese gold major -cashed up and hungry - and Randgold have $260 million cash looking for a gold play in Africa. Their criteria -about 3 million ozs and based on a gold price of US$ 600 oz. So anything north of $700 is a licence to print money with vastly reduced cash costs. Ask Randgold -

Forget uranium -it will not fire -just a few spot sales in my opinion.

Gold will fire mate - BIG TIME - trust me !!

And Iran converting fiat money to gold - must figure they can escape with gold ---