what makes gold companies valueable (not gbm)?

It's now 11 months since GBM subsidiary went into administration, and, from where this shareholder sits and suffers, nothing effective has been done.

The company languishes, suspended, and last traded at 3.7 cents, giving a market cap of under 4 million. Why?

Here is a rough stocktake of GBM, against an approximate checklist of "What Makes a Gold Company Valueable":

Positives:
1. Environment - there is unprecedented interest in the Gold sector. It's never been better for Gold, although some potential for a bursting of China's bubble with flow on effects on the minerals sector remains.
2. Price of Gold - Never better, with plenty of upside yet.
3. Cost of Production - GBM expected to be a cheap producer, at $AU460 per ounce (announced 18 months ago). Is this real?
4. JORC Resource - 156,000 ounces, at $AU1300 less say $AU 700 cost and overhead => $ 93 million net in ground resource value.
5. Rate of Production - 20,000 oz per annum => net operating profit should be $ 12 million p.a.
5. Exploration Potential - 500,000 ounces (and that appears to be strongly understated)
6. Underground Mine - the average costs of an underground mine is $ 100 million. GBM has one that produces ore at 30 gms per tonne.
7. Life of underground mine - 8 years of current JORC resource. But unlimited given the 500,000 oz plus exploration potential.
8. Plant - announcements and photos over the last 12 months indicate the plant works.
9. Area of operations. The Victorian mines department announced an expectation of 5,000,000 ounces of gold in GBM's region of operations. There area is historically the third biggest producer in the world, and is still regarded as under-explored. GBM has nine mining licences in this area.

SO this company appears to get ticks in every box, providing the company's announcements are not a complete fiction.

So GBM should be worth $ 50 million, but say $ 20 million intially.

Negatives:

10. They have made a number of stuff-ups since floating - not the least of which was the plant taking 12 months and a few million over budget, along with apparent board disputes and rumours of dodgy characters (see Supreme Court judgement in D. Cahill, now resigned) fixed after considerable time.
11. Reporting and communications - Consistently appalling.
12. Inability to refinance:
They have made several announcements that they are working with financiers. The last announcement proposed a 200% dilution. Why is the company continually failing to get the required investment over the line, at the absolute bargain basement market cap of under $4 million?

The answer can only be .. A lack of confidence, on the part of these prospective investors and the wider investment market, in the management and the board. You'd think, given all the ingredients above, that this cake can be baked in a month or so, by the right group of people.

I satisfied myself some time ago that the existing management and board were good people - geologist, merchant banker, and lawyer. But it was suggested, this is not enough pure mining/management skill. Now they have a track record of failure.

Should the existing management and board be focussed on bringing some new blood into the company - blood that has a track record of success in gold mining, as opposed to failure?

If the company is indeed entirely out of cash, I am sure there are experienced executives about who would work for shares, and there are executive search agencies who would do the same, if asked. This would surely be less dilutive to existing shareholders than a complete fire sale share issue.

I have written along these lines to the company, and tried unsuccessfully to call to follow up, but was not able to enter into a discussion or elicit a response.

What do other followers of this forum think? Am I getting this wrong? If you agree, and have a line to the Directors, can you give them a rev up? Maybe they can't see the wood for the trees.