Yesterday, Doug Belanger of Gold Reserve (GRZ) and his managerial team sent out this PR that informed its shareholders that it is now “in dispute” with the government of Venezuela and made clear noises to the effect that if they weren’t allowed to move forward with their ‘Brisas’ gold project they’d take Venezuela to court and claim U$5Bn (yep, with a B) in damages. GRZ stock rose this morning on the news, which can only mean that people holding shares in this company are among the top echelons of stupid in the world of stock market investment. Really and truly stupid, stupid, stupid.
The word to understand here is “never”. Be clear of its meaning and definition as used in the English language, as you can now be assured, once and for all, that GRZ will never mine or even get close to mining Brisas. GRZ shareholders are quick to point out the (dwindling) cash pile at the company. Well what’s the point of having a whole bunch of money when you will never…repeat never…use it? Belanger understood this last year and decided to cancel the ordered equipment. He knows he’ll never ever get to use it, so it’s better to have a whole stack of money to pay his own salary and benefits for the next five years until he retires.
As for threatening Venezuela with court action…over a concession sitting in the middle of Venezuela? LOL!!!! To begin with any case would take forever to be heard. For seconds Venezuela would never (repeat never) recognize any ruling and for desserts all they need to do is take an army unit down there with one guy holding a piece of paper with “expropriate” wriiten on it and it’s all over anyway. Ask Freeport about its claims on Cuba’s nickel concessions to get some context about the chances you’d have of ever seeing any of the money.
In the weird world of Belanger, GRZ is currently worth far less than even the cash it has at bank as it’s already clear as a bell that the only publicly listed company in the world in a position to buy it out will be blocked at everyturn by the self-serving management at GRZ. There is no point in holding stock in this company. None whatsoever. Why hold a speculative and high risk stock such as a junior gold miner in Venezuela when there is no reward possible? Truly a stock for the stupid.