Golden Hope Mines

Thanks for these links mineomoney. Here is a great list of variables that affect share price:

Valuation Factors

Many factors can cause a given gold stock's position on the current Gold Explorer-Producer Valuation chart to deviate from its expected placement. These factors include, ordered by importance:

• Management team -- what is the experience of the management team to plan and execute based on the type of mine, partnerships involved and the host country regulatory environment? What are the track records of management and, if applicable, the joint venture partners? Management failure generally equals company failure while a solid and experienced management team can avoid many of the potential pitfalls in the evolution of a junior mining company. Always review the track record of management, checking both successes and failures.

• Ability to mine -- are permits available, is there local support or opposition, is the government mining friendly or is mining banned. Is the mine site near a world heritage site? Are there land use conflicts? For example, consider El Salvedor and Mining Location Risks.

  For a second example consider the market reaction to: Greystar Resources Announces Request by the Colombian Government for a New Angostura Environmental Impact Assessment on April 26, 2010 -- the GSL stock price dropped approximately 40% with that breaking news.

• Mining feasibility -- does the company have Proven + Probable reserves and a matching Feasibility Study? Is the necessary funding to implement the mine development plan detailed in the feasiblility study available or accounted for in the current stock price? As an example, Osisko, is being valued by the market well beyond the Gold Producer Valuation Line since Osisko has demonstrated mining feasibility, raised capital and has good potential to further increase its reserves and resource through continued exploration of its current property.

• Land holdings -- what operating mines are near company land holdings? Is there drilling activity nearby? Have airborne surveys identified future drill targets? Are the holdings in an area with abandoned mines, either historical workings or mines abandoned due to low metal prices in the early 1990s? Some silver companies, Alexco Resources (AXR) and Impact Silver (IPT), and gold companies, San Gold Corporation (SGR) for example, appear to trade a premium to their peers. However, each of these companies holds land holdings with old mines (or old mine sites) and have idenfitied immediate high grade ore targets for near term production (or are already in production) and offer significant upside potential for future resource and reserve discoveries in terms of multiple future drill targets.

• Share holdings -- what shares of other companies are being held? Many times, junior gold and silver explorers/producer settle sales with shares. For example, Garibaldi Resources (GGI) sold its Temoris project (54,810 hectares adjcent to Coeur's Palmarejo project) to Paramount Gold & Silver (PZG) for 6M shares of PZG. Although Garibaldi Resources has a very significant land position in Mexico's Serria Madre, Garibaldi has until recently traded at a valuation roughly equal to the value of its PZG shares holdings.

• Geopolitical risks -- what is the risk of being nationalized, having your project cancelled or being subject to a future mining banor? These risks are insignificant in some mining regions (e.g. Canada) but could be significant in Venezula and other countries. For example, consider a January 2010 news story, Pakistan province aims to end Barrick mine venture. If Barrick's Reko Diq project had a positive Feasibility Study, that Feasibilty Study is potentially at risk of becoming irrelevant. Therefore, the geopolitical risk factor is beyond what is typically estabilished in a Feasibility Study.
  
  Another example of Geopolitical risk would be Venezuela's move to nationalalize Crystallex's Las Cristinas gold mine. If Crystallex were plotted on a Gold Explorer-Valuation chart, it would appear in the extreme upper left hand corner since few if any investors expect Crystallex to be able to produce gold from Las Cristinas. Also see Geopolitical risks below.

• Precious metal premium -- gold and silver companies command a premium while base metal producers may trade at a discount. For example, consider Yamana Gold (YRI) which recently had an average ore value per tonne of US$41.97 and Market Capitalization per ounce of Gold Equivalent of US$234.66 placing Yamana Gold well to the left of the Gold Producer Valuatioin Line. However, Yamana Gold only gets 68.4% of its market capitalization from gold and is being valued more as base metal / copper producer than a gold producer.

• Hedging -- if a company is using various hedging strategies then its placement on a Gold Explorer-Producer Valuation chart is expected to be distorted since the potential for future gains (or future losses) have been reduced by the hedge.

• Companies with multiple deposits -- a given mining company may own multiple ore deposits of which only a small number have been advanced into or prepared for production. As a result, the individual deposits need to be considered and the overall company evaluated as a combination producer and explorer.

• Cash flow failures -- Producers, especially small producers, may have trouble achieve the necessary economy of scales forecast in their Feasibility Studies and as a result may not be able to realize their full valuation potential due to cash flow problems. Alternatively, future cash flow potential may be diminished as a mine approaches its end of life phase. In such cases, a company is expected to move towards the left hand side of the Gold Explorer-Producer Valuation chart.

• Anticipated financing -- the need to raise capital for general operations or infrastructure likely means stock dilution or hedging of future production. When the market anticipates pending financing then a company's placement on a Gold Explorer-Producer Valuation chart is expected to drift to the left in anticipation of future dilution. Small producers may have trouble achieve the necessary economy of scales and as a result my not be able to realize their full valuation potential due to cash flow problems.

• Market Anticipation -- as new drill programs and drill results are announced, the market may start anticipating or expecting resource or reserve count increases. The announcement or the anticipated announcment of significant drill results from exploratory programs can be enough to cause a stock price jump. Alternatively, stock price moves can be the result of take over or buy-out rumors.

• NSR Royalties -- what percentage of net smelter return is subject to royalty obligations? Are there buy-out options / caps? Are the royalities industry typical or extraordinary?

• Market conditions -- speculative manias, or gold fever, strikes with regularity and prices of explorers with great drill results, in the right region of the world, get irrational price run-ups. Companies with bonanza grade drill results that are not part of any NI 43-101 report should be watched with caution -- betting on drill results is much more of a casino style gamble than an investment. Now, I do love gambling but I prefer to do my gambling on green felt as opposed to drill results released in advance of NI 43-101 disclosures. BreX and the Busang project are perhaps the best example of speculative feaver.

• Excessive promotion -- promotion does happen on junior explorers (and major as well no doubt). It is always a good idea to check where the out of the money warrants and options are relative to the stock price. Are there slightly out of the money options and warrants due to expire in the near term?

• Option and Warrant expiration approach -- since GoldMinerPulse uses a fully diluted share count, which includes out of the money options and warrants, expirations can cause minor shifts in a given company's placement on the Gold Explorer-Producer Valuation chart.

• Interpretation errors -- an apparent exception may simply be the result of miscalcuations by GoldMinerPulse or your own source of the company's reserves and resources. This is particularily a problem when relying on multiple NI 43-101 complaint disclosures in cases where the company has NOT provided consolidated figures.

• Environmental risks -- are there potential environmental liabilities from historic operations? Can new operations be built while maintaining a reasonable risk exposure?

• Disputes -- pending lawsuites may account for a pricing exception since the market may be anticipating an outcome from and its resulting implications on a company.

• Supply and Demand -- classic stock trading pressures on stocks create a cycle of over bought and over sold conditions which could contribute to stock price deviations from a projected fair market price.

By definition almost, junior explorers have not reached a development stage where they would have been able to prepare a Feasibility Study or even a scoping study -- for more discussion of scoping studies and how a Scoping Study differs from a Feasibility Study please see What is a Scoping Study?. Therefore, for most junior gold explorers the following additional factors need to be considered as part of the mining feasibility exception assessment.

• Quantity of ore -- demonstrating feasibility of small deposits is hampered by lack of opportunity to achieve economy of scale in future operations. High grade ore with an accompanying high Average Ore Value per tonne is not going to be of interest to established gold mining companies and therefore limits interest in the deposit.

• NI 43-101 classification -- Proven + Probable reserves are more valuable (certain) than Measured + Indicated resources and Measured + Indicated resources are more valuable than Inferred resources.

• Recovery and metallurgy factors -- what percentage of in situ metals will be lost in mining and processing stages? The recovery and metallurgy factors would be fully accounted for in the Proven + Probable reserve estiamtes but are unlikely to be fully understood when a resource is in the Inferred category. Therefore this factor is directly related to NI 43-101 classification factor.

• Intercept width -- what are the typical intercept widths of the mineralization? For example, consider Citigold and their Carters Towers gold project which reports 10M oz of Inferred gold at an average grade of 14 g/t. The recovery is 97%. On the surface, 10M oz at 14 g/t with 97% recovery sounds extremely attractive, yet the market valuation on Citigold was roughly US$10 per ounce of in situ gold. I believe the reason for the valuation being so low is a direct result of the fact that intercept widths vary between .2m and .7m. That is, it is going to be expensive/difficult to mine something that 1 to 2 feet wide. For what might be a classic study in narrow vein mining the reader is referred to Inferred Mineral Resources - Charters Towers Gold Project and the Citigold web site.

• Infrastructure factors -- what are the estimated mine development costs? are there good road to ths site?, what are the available power sources?, is water available for mining usage?, is a workforce availability and is there housing for the workforce?, are exisiting mills/smelters available?, etc. I.e. what needs to be built, when and what cost?

• Operating costs -- what are the expected operating costs over time to process a tonne of ore and extract the metals? How sensitive are these costs to the price of oil or the price of the main source of power (i.e. the national power grid) for the mining/processing operation?

• Expected extraction methods -- underground extraction can be 10 times more costly than surface extraction. For example, look at Fresnillo slide 6 of 26 where the Herradura open pit had an operating cost of roughly $5/t while Fresnillo underground and Cienega underground ran at $35 to $60 per tonne.

• Quality of the independent NI 43-101 reports -- what is the track record of the groups doing the estimate and what have were the changes to the estimate as the deposit progresses from an inferred classification to a proven classification.

• Non NI 43-101 reports -- gold mining companies that do not trade on Canadian markets do not produce NI 43-101 reports. In such cases, the mapping of reserve and resource disclosure standards need to be understood.