low pog survivalists

What gold miners/developers are destined to not just survive , but thrive in a low POG environment. Assuming the POG stays between $900 and $1200 longer term POG ? (not that I think it will!)

There are some out there....

My interest in this is for two reasons.

1. Take over potential :

Co's that have assets producing at low costs or that have an attached PFS or DFS to an assest that indicates healthy margins at a lower POG are going to become even more attractive if the POG stays below industry average cash costs. Will they attract a bigger premium in the event of a take over ?, as these assets become even more important to the survival of the majors? I think so.

2. Survival of the fittest:

Co's that can operate profitably in a low POG environment will attract a larger share of the remaining money thats available in the sector, helping to sustain their share prices going forward . As more cost-heavy producers fall by the wayside , these co's will emerge unscathed when a higher POG returns or cash costs fall inline with a drop in commodity prices and a more competitive mine-supply environment.

The good news is ,that a few of these co's I've identified as having low enough all-in costs, have fallen just as much as all the higher cost miners/developers. So the potential for some big gains could be around the corner, even if the POG stays down at these levels.

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Example:

One company that I think has a very good chance is Papillon Resources.

This has fallen from $2 to 70c recently , along with all other goldies.

PIR had a PFS out last week , stating $750/oz all-in cash costs ! (this includes ALL COSTS including royalties etc)

4.3mill/oz @ 2.5g/t resource (which will grow to 5mill/oz+ this year at least imo) and targeting 300k/oz/yr production over 9+ years.

Net profit per year at $1100/oz POG is still over $100mill, as per the PFS. Factor in higher gold prices above $1200/oz and these guys are going to make a motza.

What makes PIR even more interesting a play , is that they have 3 larger gold miners only 50km away , who are desperate to replace ounces from their depleted existing mines (randgold in particular is on the hunt for new assets).

Brokers are flocking to iniate coverage on PIR since the PFS with average consensus around $1.90- $2.20
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I would be interested to see other co's that ppl know of that have ALL-IN cash costs below $800/oz and targeting production of over 200k/oz/yr (especially if they are existing producers) and I'll take a look, as these will be the most prized assets going forward....

Gold mining industry used to be all about growth. Now its all about MARGIN ,MARGIN ,MARGIN, as it always should have been imo.