Lots of Sound and Fury about Goldspring...

Signifying nothing!

OK, we exaggerate. It signifies that GSPG is a typical pump-and-dump penny stock, in which our old friend TrueCasey takes on the role of bagholder for the insiders.

Today we have seen the biggest one-day gain in gold EVER.

And GSPG down over 20%.

Why? Because for all the talk about 43-101s, estimates, plans, drilling, etc., GSPG still has nothing that rises to the level of "proven reserves." Note that their shareholder presentation yesterday carefully uses the word "resources," and in fact gets more specific in noting that they are speaking only of "indicated resources."

Note that under Canadian 43-101 rules, the following classifications of resources and reserves are used. In increasing order of "certainty" they are

• Inferred Mineral Resource
• Indicated Mineral Resource
• Measured Mineral Resource
• Probable Mineral Reserve
• Proven Mineral Reserve

We are going to give GSPG the benefit of the doubt and assume that their "43-101" report actually follows the Canadian rules for such documents. GSPG of course is not a Canadian company, and is not legally required to comply with that standard or to issue this report at all. As far as US law is concerned, they could shit on a piece of paper and call it a 43-101 if they wish to.

Per the above cited standard anything called a "resource" is not yet shown to be economically viable. Most operating mines consist primarily of Proven Reserves, often with some Probable Reserves around the edges and lots of "resources" in the property surrounding the economically-viable mine.

If you check out the GSPG presentation as filed with the SEC, they very clearly avoid the use of "reserve." This is not surprising because the US definition of what constitutues a "reserve" is even tighter than the Canadian one and they clearly can't meet it at this time, if ever.

Indicated resources, of course, are just above the lowest classification available. A project consisting entirely of "indicated resources" is still extremely speculative and may never yield any economic results. So, when they say they have over $400m of "indicated resources" the liklihood is that they will never get anywhere near that much value from that piece of their property.

And what is their plan going forward? It's vague. Normally with indicated resources, your next step would be to do a feasability study, during which some of those "indicated resources" would get upgraded to "measured resources" and eventually might be categorized as "reserves" if the proposed project meets criteria for economic and legal viabilitye. That doesn't seem to be top on their list though.

Instead, they use most of the rest of the presentation talking about potential other areas for exploitation and very little about finishing the exploration and feasibility study in this one. They suggest that actual mining could start next summer. We thought they said it would be this summer some time back? I suppose they got distracted. Just like TrueCasey.

This is typical of a pump-and-dump company. Always something new out there worth exploring, but never anything completed. And always some new suckers to buy stock so they can pay the interest on their debt at 24% to "friendly lenders."

It strikes us this company is just a corporate version of TrueCasey. Lots of sound and fury signifying nothing, but a lot of entertainment for the otherwise uninvolved.

And that is the view from FalseCasey HQ, where hope is still not a viable investment strategy.