Miners, particuluarly gold miners should import CEO's and senior managers from industrials rather than promote managers from the mining culture.
Industrials realise the need to grow EPS and pay out good dividends while the mining industry is conditioned to not paying dividends and cap raising when the make a mistake.
Any goldminer who has real costs over $1200/oz ( by real costs I mean ((Average price achieved minus NPAT) divided by no of ozs sold )* should review their operations and , if neccessary, scale back to achieve this.
Over the forward life of most mines, the POG will likely drop under $1200/oz and CEO's and boards should be ensuring that investors funds are not at risk over the longer term.
i know that the higher cost miners give more volitility to SP which is fine and dandy for traders but not for long term investors.
Cheers Moorookamick
* If we apply this genuine cost/oz to NCM for fin year 2011-2012 we get: NPAT.................$1.117 bln No of ozs sold...2.286 mil Profit per oz......$486 Av price realised ..$1650 therefore real cost is $1164/oz Granted, last year was nor a good year for NCM but by this formula NCM, IMO, will have to get its real costs down below $1000 to be profitable in the long term. They can do this with the current ramp-ups and conservation of cash with less cock-ups. MM
NCM Price at posting:
$23.73 Sentiment: Buy Disclosure: Held
