Replies to post #30182 on Value Microcaps Junior Miners

[checkmate28]

GORO MC 500Million Low CAPEX production bump, High grades, low cash costs, 7% divy makes GORO a worthy contender for being one of the better values out there

GRADES 12.75 gpt Near highest in the industry

Costs Near lowest in the industry $419/oz after credits and royalty

Cash 12/31/12 $36 Million plus 6 million in treasury bullion

2012 Avg production rate 773 tpd for 90,000 oz production and $88 million gross mine profit (includes severe down time in Q2 to rehab mine)


2013 Guidance 80 - 100K oz
Current expantion 1300 - 1500tpd by EOY 2013 (75
% increase)will give them a worthy bump in 2014 -15. They are cautious and holding back guidance until they get their ramp up running smooth.

While short term CAPEX requirements and low price of gold may threaten the divy, chances are they will find a way to pay the divy ,while the 75% increase in production capacity comes on line.

While GORO is light on 43-101 oz as they didn't need that to finance the initial mine, they have plenty of gold.
2013 $10 million explor budget , 6 drills

[Lone Clone]

I was responding to a request that I detail what I DON'T like about GORO's management.

I do salute their achievement in developing the mine, but building a mine and running a mine are rather different skill sets. Unfortunately GORO management's behaviour over the last couple of years has raised a number of red flags which I detailed in my post, so at this point I would be remiss to recommend them as an investment, particularly as I expect the share price to drop precipitously when they inevitably cut the dividend in the next few months.

If management is foolish enough to go for debt or equity financing to avoid cutting what is an unsustainable dividend, I will go with the words of one of my favorite Monty Python skits. "Run away!"

LC