Discovery Gold Comments on Gold Price Drop and Strategic Geologic Location
DENVER, April 23, 2013 /PRNewswire/ -- On April 2nd, 2013, Discovery Gold Corporation (OTCQB-DCGD) (the "Company") commented in a press release about its geologic similarity (per its recent 43-101 report) to gold deposits being mined nearby in Ghana's prolific Ashanti Gold Belt; and the Company's President, Steve Flechner, noted his belief "that gold prices will remain strong." Ten days later, the price of gold plunged 4.7% on Friday and another 9.6% on Monday. This press release, therefore, is to briefly summarize a few of the reported apparent reasons for the historic price drop, and for continued confidence in the future for gold prices and for the potentially significantly underpriced stocks of strategically located gold exploration companies.
Widely followed and highly accomplished gold-bulls like Jim Sinclair (CEO of Tanzanian Royalty Exploration & former advisor to the Hunt family), Eric Sprott (Sprott Asset Management), Frank Holmes (President of US Global Investors), and others suggest literal market manipulation beginning with the US Federal Reserve which arguably wants to support the value of the dollar and reduce the value of gold reserves such as those that it recently was asked to return to the German Bundesbank, and agreed to do so over seven years, raising speculation that some of their physical gold inventory has perhaps been leased, loaned, or used as collateral for other leveraged financial transactions. Former Assistant of the US Treasury, Dr. Paul C. Roberts was quoted by The European Gold Center (EGC) on April 12th saying, "The exchange value of the dollar is threatened and if that collapses the Fed loses control over interest rates…they've got to establish in people's mind that the dollar is the only safe place…not gold."
Meanwhile, the EGC reported that a major investment bank turned negative on gold and recommended that their clients go "short" gold, which is selling future contract paper. The investment bank cited US growth and further rises in the stock market expected later in 2013 as rational. Then, according to EGC and London monetary metals trader, Andrew Maguire, another major investment bank "stunned the markets right at the opening by selling massive gold futures contracts." This steam rolled as highly leveraged gold futures investors faced margin calls requiring more cash collateral or gold sells, until the price reached down to $1550, which had been commonly established as a basic support level, triggering an avalanche of automatic "stop loss" selling.
Adam Hamilton of the acclaimed Zeal Intelligence Newsletter explained on April 19th that this "gold panic was a forced selling phenomenon driven by a support break crushing over-leveraged futures players…traders got scared…bullish fundamentals for gold did not change one bit…central banks didn't suddenly drop their vast gold hoards…and no massive new gold mines suddenly came on line…And after panics even in the stock markets, prices always double over the subsequent two or three years…Global central banks are drastically ramping up their paper money supplies, leading to overbought stock markets…Once these inevitably turn, demand for alternative investments will soar…And investors are woefully underinvested in gold, it is still on the order of only 0.5% of Americans' total portfolios…The bargains among dirt cheap hyper-oversold gold stocks are truly epic."
Discovery Gold's President, Steve Flechner concluded that, "I believe that our Company's stock could be one of these bargains. Since January 2013, Discovery Gold has been pleased to report that; (i) its Edum Banso mineral concession Option rights were formally approved by the Ghana Ministry of Lands and Natural Resources; (ii) that independent geologists from CME & Co visited Edum Banso, collected gold bearing rock samples, and completed a 43-101 compliant Assessment Report now posted on the Company's website; and (iii) that the Assessment Report includes trenching and initial drilling work program recommendations for exploring high priority gold targets that have similar geology to gold deposits being produced nearby on an adjacent property."
About Discovery Gold Corporation
Discovery Gold Corporation is an emerging U.S. based mineral exploration company. The Company's wholly-owned subsidiary, Discovery Gold Ghana Limited, currently holds a 95% interest in the option of the exclusive rights to explore the Edum Banso Gold Project within the historic and prolific gold producing Ashanti Gold Belt in Ghana.
For further information regarding Discovery Gold Corporation, contact:
Forward-Looking Statements/Disclaimer: Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may be identified by the use of words such as "anticipate", "believe", "expect", "may", "will", "would", "should", "plan", "projected", "intend", and similar expressions. The Company bases these forward-looking statements on current expectations and projections about future events, based on information currently available. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. The Company disclaims any obligation to update any of its forward-looking statements, except as may be required by law. The Company has no mineral resource or reserve estimate for the Edum Banso Gold Project at this time, has no assurance that it will discover significant mineral resources, and may not have sufficient funding to thoroughly explore, drill or develop its property.
SOURCE Discovery Gold Corporation