Great Basin Gold Ltd.: Anticipating a shining future

Gold has been the most intoxicating of commodities dating back to antiquity: it has started wars, inspired exploration, exulted great love affairs and toppled regimes. It’s most revered application, though, has been as a store of value and exchange medium, especially during tumultuous times.  In modernity, thanks to modern portfolio theory, that application has morphed into portfolio diversifier: gold and most stocks tend to be lowly correlated, so gold reduces a portfolio's volatility. 

And, of course, gold is valued as a stand-alone investment, though one difficult to value.  Any cash-generating asset, like a stock or a bond, is worth its expected future cash flows discounted to the present, but gold doesn't generate cash. On the contrary, gold is a cash consumer because of storage, insurance and opportunity costs; therefore, investors might consider a more liquid form of ownership, such as a gold-mining stock. 

On that front, we like Vancouver-based Great Basin Gold Ltd. (AMEX: GBN), like most gold mining stocks, performs a dual role for investors, first as a gold proxy and second as equity investment.

Great Basin specializes in acquiring, exploring and developing gold and silver deposits, focusing on two primary projects: the Hollister Project on the Carlin Trend in Nevada, where an underground exploration and development program is underway on a portion of the property called the Hollister Development Block, and the Burnstone Gold Project in the Witwatersrand Basin in South Africa.

Great Basin is considered a “junior” exploration company (at least in industry patois) because it holds advanced development projects, but doesn't actually produce any substantive gold at the moment.

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