hot to trott !!, page-8

"SAR has got itself disciplined and is not exposing itself to large debt loads" - absolutely spot-on, basilbrush8.

I think you will find that SAR's cash flow story is only going to get better from here onwards (assuming the POG doesn't fall further).

In the June 2013 quarter, revenue totalled $54 million and expenses $63 million - hence the reduction in the cash position from $18 million to $9 million. However, expansion capital, which made up $18 million of the total $63 million spent in the June qtr, is forecast to be zero. I suspect the sustaining capital amount will also come down.

SAR have spent over 200 million in the 3.5 years to June 2013. A lot of shareholder value has been destroyed over the past 18 months. I have in the past been critical of SAR's aggressive growth strategy. However, a large portion of their expansion capital has been funded from internal cash flows rather than debt, leaving SAR with a net debt position of $8.7 million.

It was prudent of Raleigh to put away the cheque book. He appears very focussed on protecting cash flow and keeping the balance sheet healthy. I believe that Free Cash Flow will drive share price performance in the near future - or should I say that once the market is convinced SAR has the ability to generate FCF - we should see a rerating and improved SP performance (again this is assuming that the POG has stabilised).

Will be interesting to read SAR's imminent announcement with forward looking guidance.

GLTA.

Deme