# GCX - Golden China



## exgeo (8 May 2007)

GCX was formed by the merger of Michelago (MIC.ASX) and Golden China of Canada. There are 50m ordinary shares and 9.5m warrants on issue. Undiluted market cap at AUD $0.75 = $37m. Liabilities of CAD $23m are partly offset by Australian Solomons Gold (SGA.V) shares worth CAD $17.4m (at SP of CAD $1.32)

Also interesting to note is that the Australian-listed ADR's are trading at a discount of approximately 18% to the Canadian listed shares (AUD 75c while the shares are selling for AUD 89c in Canada (@ CAD 81c/share))


*Bayinhar (China)*
The closest project to production is the Bayinhar project in China. It is planned to produce 100 KOz Au/yr by 2009 from the resource of 605 KOz @ 0.77g/t Au. Low cost heap-leaching will be used to extract gold from the oxide part of the resource (most of the resource so far defined is oxide material). Drilling is ongoing and is discovering sulphide mineralisation at depth, below the existing resource. The company is hoping for 1MOz in total. A full feasibility is scheduled for completion in Dec 2007. The pre-feas. estimated a cash cost of USD $280/Oz Au. Capital cost is USD $29M (quite low compared to the cost of a mill and cyanidation plant).

A back of the envelope calculation gives (680 – 280) * 100,000 = USD $ 40M/Yr. = AUD $48.2M =  *AUD $0.80/share***
This is not the same as EPS because no account has been taken of taxation etc.

*Bacox Gold Plant (China)*
GCX has an exclusive 10 year license to utilise patented Bacox (bacterial oxidation) technology for extracting gold from refractory sulphide ores and concentrates. The plant (currently operating) was acquired from MIC. Currently they produce gold from bought-in third party gold concentrates, producing an EBITDA of CAD $3.5m/Yr. Presumably this plant could be used to extract gold from the primary sulphide ore (or a flotation concentrate thereof) found at Bayinhar below the oxide resource.


**** Using AUD/USD = 0.83c, gold price = USD $680, fully diluted no. shares = 60M


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## exgeo (7 June 2007)

*5/6/07*- Director David Paterson spends CAD $128,542 buying 200,000 shares (per share CAD $0.642 = AUD $0.72)

*
6/6/07-* Ongoing drilling programme gets positive results including:

69 m @1.2g/t
52 m @1.1g/t
39m @ 1.7g/t



> Golden China’s 2007 Beyinhar drilling program at Beyinhar continues to successfully delineate a wide, continuous, shallow, mostly oxide gold deposit, approximately 150-200 metres wide, 80-110 metres deep and at least 2km long. The deposit is demonstrably open along strike and down-dip.



GCX are planning to use heap-leach to extract the resource, so a very low cut-off grade could be profitably employed.


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## gunditrader (4 July 2007)

Exgeo
Going on the company PFS figures this is stock looks very promising. 
Diluted MC of ~ CAD 50m.  
Gross profit ~ USD40m. 
Seems almost too good to be true. 

However there are a few factors that need to be cleared out for sure. 

Firstly at such low grades 1g/t I am very skeptical on the production costs of <USD300 an ounce. I am not certain but to me the mineralisation is not from the surface and as such raises questions about the strip ratio on this one. The other worry is the capital costs and associated funding. 

Do you have any idea on why the SP has halved in the last six months?

Any thoughts of yours would be greatly appreciated. 

Cheers GT


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## exgeo (4 July 2007)

Well I'm assuming (maybe naively) that they wouldn't have "forgotten" to include the costs of stripping in the cash costs of production. Heap leaching is a low-cost way to produce from low-grade orebodies. It's essentially an earth-moving operation. Google heap leach gold if you are interested in digging further on this (no pun intended).

I bought my shares at an average price of 65c and sold at 55c a few weeks ago. Looking at the volume of orders on the buy-side, perhaps I was a little premature. SP now recovered to 60c. Note to self "stop trying to catch falling knives!"


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## gunditrader (5 July 2007)

Hey Exgeo

Looks like you're falling knife may have finally hit the floor. Great bounce today. Has been as high as 76c. Still trading at a discount to the TSE listed shares though at current prices. Don't have anything to explain the jump. 

It is however at very tiny volume and non existent liquidity, so nothing to get too excited at yet.


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## ta2693 (5 July 2007)

It is a good share. I am in today. I think someone must know something we do not know, otherwise It can be not explain the 60-70 gap this morning. 
Who is the bidder put 310000 at 70c? If I am not wrong, something positive will happen very soon.


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## ta2693 (6 July 2007)

The Buyer is UBS in Canada, I think the300000 at 76c must be UBS as well.  
14:53  	0.800  	4,000  	+0.000  	UBS Securities  	Man Financial
14:53 	0.800 	9,500 	+0.000 	UBS Securities 	GMP Securities
14:12 	0.790 	5,000 	-0.010 	UBS Securities 	Anonymous
14:11 	0.790 	5,000 	-0.010 	UBS Securities 	Anonymous
14:11 	0.790 	3,500 	-0.010 	UBS Securities 	Anonymous
14:06 	0.790 	200 	OLT 	UBS Securities 	Dundee
14:06 	0.790 	6,500 	-0.010 	UBS Securities 	Anonymous
13:12 	0.790 	7,000 	-0.010 	UBS Securities 	Anonymous
13:10 	0.790 	7,000 	-0.010 	UBS Securities 	Anonymous
12:00 	0.750 	34 	OLT 	Dundee 	CIBC


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## ta2693 (6 July 2007)

UBS put 200000 at 80c, 300000at 76c. 
the normal volume for GCX is 100000 per day. How come they can be filled by others? It either would be a preset trading going to happen today, or UBS want to pump and dump this shares.  It is very strange.


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## ta2693 (6 July 2007)

I think I am in something have the potential to have five to ten times bag gain. 
Refer its presentation in Feb. GCRC is hugely undervalue. The fair value is at least 5 to 10 times bigger than right now, make the price come to $8 a share.

I do not know how to paste the pdf but it is on 21/02/2007 corporate presentation. Just compare the market cap and projected production, you will come to the same conclusion as me.


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## ideaforlife (6 July 2007)

I have always believed GCX is undervalued, but they have not got attention from institutions. Apparantly the buy of UBS is a signal of big investor entry. I think it's just the start of price going up. Good to see it.


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## ta2693 (6 July 2007)

ideaforlife said:


> I have always believed GCX is undervalued, but they have not got attention from institutions. Apparantly the buy of UBS is a signal of big investor entry. I think it's just the start of price going up. Good to see it.




Yes fundamentally speaking, 5 to 10 bagger for gcx
But the UBS's behavior is very suspicious. They are showing off and make the whole market aware of what they are doing. The only intention of this behavior is to pump the price.

The market depth is also very suspicious, It more looks like a trap from my point of view. If UBS withdraw its bidding, there are basically no other buyer and UBS may have accumulated a lot at 60c and waiting the market depth built up, then dump at 70c. 
Why UBS is the only buyer? Where is other investos?

I


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## ideaforlife (6 July 2007)

ta2693 said:


> very suspicious, It more looks like a trap from my point of view. If UBS withdraw its bidding, there are basically no other buyer and UBS may have accumulated a lot at 60c and waiting the market depth built up, then dump at 70c.
> Why UBS is the only buyer? Where is other investos?
> 
> I




I agree this buying behavior is not discreet at all. I have too little market experience to explain this.


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## ahspritemk (7 July 2007)

GCX have been on my radar for a while now and really grabbed my attention the past few days. Placed a very small order today just after reading the latest presentation and was transacted at 4:10. Seems to be having a nice increase in volumes. Looks like this stock has been oversold over the past month and a half, hence the sudden outbreak. But with such a sudden jump I can picture a short term dip although i reckon if the sp made it to .85 next week then it might find some support. Should be very entertaining over the next year.

The undervalued price could be due to people not comfortable with prospects of operating in China (this is what worries myself more than the usual) IMO.

The medium term dates to watch these shares will be:

Schedule:
− Increased resource: Oct 07 
(GCX are hoping to announce an increase of their resources to over 1m oz.)
− Feasibility Study: Dec 07

This can be viewed in the presentation released today.

http://www.goldenchina.ca/uploads/Corporate%20Presentation_July%202007v7.pdf

I have just started learning some of the advanced charting skills and would love to see someone with more knowledge have a look.
Cheers


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## ideaforlife (9 July 2007)

I assume the reason that UBS buying is so obvious might be after a long time over selling, major stakes remain in the hands of really insiders therefore UBS had to bid really hard to get any. Correct me if I'm wrong.

Actually mining is China in my opinion is not riskier than in S.America or places like Congo. The social stability in China provides sound ground for development. Political risk has been declining rapidly. Canadian miners have been more active there than Aus miners.


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## ahspritemk (13 July 2007)

Tha past few nights I have been staying up late to watch the transactions on the TSX. Last night UBS sold some very small amounts, i am trying to decide whether UBS might be trying to lower the price so they can buy a lot more or whether UBS simple wants to reap profits.

I have noticed Canadian company Canaccord has been puchasing a lot the past few days. So far today it is currently 1Pm on the TSX and I estimate Canacord have purchased 150 000 to 200 000 out of the total volume to this current point in time of 278,600, which is quite a high volume compared to the asx listing. Its amazing to see how differently the Canadian and Australian volumes react although the pricing tends to be a bit sideways with the exception of the 4th on the asx.

TSX   $Close  Volume
Jul 12  0.80  278,600 ---> Not closing price & volume, price & volume @1PM
Jul 11  0.77  93,300  
Jul 10  0.75  343,239  
Jul 09  0.75  27,020  
Jul 06  0.76  135,700  
Jul 05  0.80  203,714  
Jul 04  0.80  555,100 

ASX   $Close  Volume
Jul 12 0.80   82,166
Jul 11 0.82   21,500 
Jul 10 0.79   62,300 
Jul 09 0.73   8,500 
Jul 06 0.80   200,000 
Jul 05 0.76   163,600 
Jul-04 0.60   108,900 


I dont know where i stand on these shares at the current point in time. On my graphs (just using Commsec), The Macd is a lot higher than it has ever been before and the Stochastic Oscillator is indicating more towads the sell side, but still very close together. I would post up the graph I have but seeing as I have only really started learning more about them I dont have the confidence.

I am 19 and have been buying and selling since i was 16. I am just starting to more in depth research and looking to find ways to make sense of certain aspects. ANY feedback would be greatly appreciated.

Cheers


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## ahspritemk (3 August 2007)

Last night on the TSX gcx reported best ever intercepts at Beyinhar.
68M @ 5.3g/t, inc 26m @ 12g/t. this is great news and yet to be posted on the ASX. Possible a good entry point early this morning, of course always do your research.


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## ta2693 (3 August 2007)

I am 70% out at 1.10 today. leave 30% free holding.
I am out because, I think the information is absorbed in the share price, 1.10 is pretty fair value at the moment. and I am short of fund recently. I think today it is the best time to out in short term( 3 to 6 months)
The rest of my holding I will leave there for long term. I believe the technology of GCX to extract gold is very advanced and friendly to environment. It may have a very bright future in China, evenif the economy crisis comes, gold's value will hold.


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## ahspritemk (3 August 2007)

I believe GCX will remain steady for the next few months. My reasons being because of the timeline GCX have put in place:

• Metallurgical test work, (SGS): October 2007
• Updated 43-101 Resource, (Mario Rossi): September
2007
• Mine Design, (Orelogy Pty Ltd): October 2007
• Engineering Study, (Kappes Cassiday Australia Ass. Pty Ltd,
“KCAA”):
November 2007
• Feasibility Study: December 2007
• EIS, (A Australia Pacific Environmental Consultants Pty Ltd):
March 2008

September should be very interesting with the updated Resources, of course this is only if everything goes to plan which i feel the management is very optimistic. In saying all this i sold out a week back at 0.97 expecting GCX to drop to 0.90, I tried to get in this morning but got held up at uni . kicking myself now


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