The investment banks seem to have been very public in their predictions for gold and that suggests that they are bored and wanted to generate some profits for their 30 June interims. They are, undoubtedly, carrying a short position.
As to copper, the price is off its best and it took a caning yesterday but it's still high and our costs of mining it should be moderate. That's in contrast to the exploration work that Kombat is doing to the west (our exploration is to the east of the mine) at a depth of 500 - 900 metres, well into the water table and with half a km of overlay. That will probably be expensive and will probably require a significant capex.
Slide 14 of the Kombat March 2013 presentation shows a cross section.
The slide does not extend to the east of the mine towards Nehlen but there have been mine works there and it's possible that deposits may be near surface as are those at the existing Kombat mine. If so, there's always the possibility that Kombat and SBR might 'do a deal': Kombat has the management, the workforce and the equipment. Paying SBR a production royalty would be cheaper and less risky than pursuing those deep deposits to the west.
That should work for us as well. SBR would avoid having to invest a lot in capital equipment and recruiting a competent management and workforce. Cash would start to flow a lot sooner.
That's all dreams and conjecture. But I was struck by that slide 14 in the Kombat presentation. In slide 18 they say that it cost them $30m to drill the exploration shaft down 800m in 2002.
SBR Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
