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6/26/12

Chart of the day is...

...Exeter Resources (XRC.to) (XRA) versus the main gold bullion ETF (GLD), January 1st 2011 to date:


A chart offered today to put Yale Simpson's "it's just not jolly well fair is it?" bag of tripe NR into its correct context. 

The plain bottom line about gold mining is that if a deposit cannot be mined at a profit it doesn't matter whether it's in Chile, China or Congo and it doesn't matter if it is 1m oz or 100m oz gold contained. It's worth nothing. Zero, zip, squat, nada, nothing. As regards XRC, Yale Simpson's opinion is that (and I quote the NR) "...the current depressed share price does not reflect the potential future value of the Caspiche deposit..." and he would say that, wouldn't he? But it's an opinion, not some sort of objective truth so let's throw in another opinion to get a bit of balance. My opinion is that XRC has $61m in cash and a market cap of $155.3m today, which means it's still overvalued by around $94.3m.

UPDATE A/H: The market rewards XRC.to for its NR by dumping the stock to close at a new 52 week low and shaving another $12.3m or so from its market cap. So, eighty and bits to go...