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Waiting for Godot (1949) -- Waiting for Gold-O (2009)

The 1949 existentialist French play "WAITING FOR GODOT" created a new and unique narrative style wherein it was shown that the core story could in fact progress without the central character actually being present.

Popular western culture kept this theme going strong, with literally dozens of modern movies featuring characters who were dead or dying - "A WEEKEND AT BERNIES" (1989) being the most outrageous exponent, given that the title character is dead for most of the film.

Much like the 'Gold story' in this very decade. The plot arcs continue to spin wildly even while the main player is on Life Support.

There are three identifiable groups in this unique piece of musical theatre:

First, you have your diehard gold guys who can't even leave the house without a ready supply of charts and handouts showing that gold, the metal, has consistently outperformed every known investment class since the Big Bang.

And then you have your conspiracy-type guys who, aided and assisted by organizations like GATA, not only believe that there is indeed a conspiracy to whack the yellow metal; but also point out, with some delicacy, that JFK once tried to shut down the Fed, looking to print his own banknotes, and where did that get him..? (Please don't mock - this very scribe includes himself in that group!)

And, finally, you have the rest of the investment universe who, aside from some idle flings, a casual roll in the hay every now and then, really has very little interest in gold, and (clearly) even less interest in the juniors.

Ahh ... those juniors. Therein lies a tale.

On this very site, many scribblers wiser than we have shown how what initially appeared to be a "consolidation" going into 2008 was actually the setup for the biggest mining resource bust in 3 decades.

In 2008, mining became a 4-letter word, and O-U-C-H is not the one that initially pops to mind.

However, as with all investing issues, the really interesting thing is not where we have been, but, rather, where we are going...?

The first question is, will the metal itself take any more hits? In other words, will we have a repeat of the goofy 1990s where economies thrived, markets soared and yet, mysteriously, perplexedly, gold itself dropped like a stone while central bankers worldwide ridiculed and derided it, selling their inventory in an astonishingly public manner....?

(One astute writer noted at the time how counter-intuitive that was. Even if you really believed that gold was valueless - hah! - overt hostile dumping was bound to lower the value of the reserves you were not selling, and create a net loss on your balance sheet .. so what's up with that?)

Well - quick take! - given the bizarre and strange dislocations that have appeared of late between the Comex price of gold and the street value (sometimes the spread is as high as a C-note), one might well speculate that the metal itself is unlikely to go lower in the months ahead, and most likely will head higher.

Which brings us to the juniors. Love em or hate em (OK, we get it, everyone hates em), you still have to wonder aloud where the new supply of gold is coming from if the juniors are dying on the vine ..?

Who said, "You can't raise a village if you forget to feed the children?"

Three charts are attached. The first is a monthly of the XAU which seems, post crash, to have finally found its sealegs and is (we hope) putting in higher lows. Time will tell.

The other two charts represent junior plays that, we think, are well worth watching because of their unusual pedigrees.

Tan Range is the godson of Jim Sinclair, one of only two figures in the gold game with bigtime street cred, serious cash, and a major find in the last two decades. (The venerable Robert McEwan of Goldcorp fame being the other).

Based in Tanzania, TRE not only has aspirations to be a serious gold/diamond producer over the fullness of time; but, moreover, Sinclair has fashioned it as a "royalty" model and -- to prove his sincerity -- keeps putting in his own cash to avoid dilution. Not a misprint. His own cash. The chart suggests a loyal following with a nice rebound already in progress.

Rob McEwan also has a dog in this race. He is the lead investor in Rubicon Minerals, a Canadian play with, so far, some really interesting assay results.

However, where these two mining mavericks part company is in the way they are funding their explorations. Whereas Sinclair is prepared to write checks, McEwan is very content to watch RBY raise money the traditional way - which means banging on doors with hat in hand, and taking whatever generous terms those kindly, fun-loving, bankers offer.

During one of the worst-ever troughs in the history of mining, RBY completed a $10.0 million financing on terms and conditions which left many of their shareholders grasping for the airsickness bag on the chair just in front of them. The chart on RBY suggests a much slower and more cautious bounce.


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