Quote Originally Posted by gonzo56 View Post
Hey elZorro,

I’m starting to take an interest in GEL, so I had a look at the earnings report ended JUNE 2012. Glancing over it, I see that it mentions that Gold recovery was “thwarted by the snow of the southern winter" and that there were high establishment costs that quarter (which are now resolved).

The report also mentions the fact that the second Gold Recovery Unit (GRU) became operational in late May and therefore is only partially reflected in the result. Furthermore, the third GRU became operational only in the last few days of June.

Considering the last report barely took into account two of the GRUs, what is your opinion on the result GEL will release in November? (How big are these two GRUs..?)
Hi Gonzo56, good point, as the next quarterly report will be the first one to show a substantial gold income on the books since the IPO. The GRUs are above the hobby level unit, but still a lot smaller than many other systems. L&M are running one 4x bigger than any of GEL's at Earnscleugh.

GELs' units can handle 50-70 cubic metres an hour, which is 50-70 scoops from a big 25 tonne digger in an hour, each. 0.2grams per cubic metre of gold is the breakeven grade, and I think they're doing twice that, so on current performance (a snapshot), they could have a net profit of $4mill a year. If they run any of the gear 24x7, this would greatly help further. But I think they are keener on tuning up the GRUs at the moment, and getting the third GRU operational. For that they'll need daylight.

Regarding the merits or otherwise of a stake in GEL: Brace yourself in the best possible way for quite a bit of news from GEL's head office dept. This has all been intimated to the market, while the weeks stretch on, but certainly quite a lot should have happened by Christmas.

WKP 35 drill assay, and other drills from WKP, could be a big impact on the company
Garibaldi - some exploration may be occuring, new hardrock find
Ophir - a JV and the other party now has cash
Muirs, report due sometime
Placer results (Drybread), 3rd GRU, JV with John Youngson, other sites
Latest PP part ear-marked for an acquisition?

Bear in mind that this is not a billion dollar company like OGC. Any results that imply some hard-rock mining is part of the future for GEL should have a proportionately big effect on GEL's shareprice. Current Mcap ranges from only $18mill to $25mill. They've spent a lot more than that on exploration, and I contend it has not been wasted.

Current price on the TSX is cheaper than over here.