BM There are also some other costs that will drain the company -...

BM

There are also some other costs that will drain the company -

1. redundancies at Atlantic Gold
2. C&M costs at Atlantic Gold until they figure out what do to next, and go ahead with moving to their next mining site, if that goes ahead
3. Costs associated with developing a plan for their next mine in Nova Scotia, and getting all approvals in place;
4. Finally cost of moving plant to their next mine site and developing that mine, if it goes ahead.
5. Corporate costs of their Oz office;

Furthermore, Simberi's oxide deposits are getting low and they are making very little free cash flow from these operations. There may also be futher capex and exlporations costs associated with the short life oxide deposit.

I really struggle to see any value in developing their next mine in Nova Scotia as its only expected to produce around 60k ounces per year - would that produce enough surplus to meet SBMs corporate costs? I think the project could just be there as a means of keeping the current managers in moolah as a make work program, but I could be wrong.

I thought Simberi with its largish gold deposit could become profitable, but perhaps PNG has now become too risky to develop the main refractory gold deposit owned by SBM - I think PNG may want a higher return from it than what has applied to current operations.

Basically I expect this mob to run down the cash on hand until SBM gets into trouble again in a few years time, but perhaps if the share price were to fall to 10-15 cents I might buy some for a hopium trade.

SBM has been destroyed by some bad luck but mostly by bad management. Only a few years ago they were very profitable and could have used the spare cash to develop their King of the Hills deposit (which they were mining to some extent and they knew there was more gold there, though too low for their smallish Gwalia mill) as well as Kallis. Instead they sold these valuable desposits yo SAR for a measly $16m to get out of future reclamation costs and ploughed around $900m into the Atlantic Gold purchase (having already relatively recently been dudded into taking over Allied Gold which almost bankrupted the company.

I had a good run here after its 2014 low, but all good things come to an end eventually.

GLA.

loki (still looking but not willing to be a victim here - at least not at the current share price)