fy2014 forecasts fundamantals, page-5

Hi Rutz,

Thanks for the response, I've actually been thinking about how best to reply.


I don't discount a companies reserves, I simply don't do long range spreadsheets with pie in the sky numbers once the business is built, mature and running, I look at the actual financial performance of the business those huge reserves are delivering.....even with expanded reserve NCM has written down the value of its businesses recently because the spreadsheet didn't come close to reality of financial performance

NCM is PRROF that expanding reserves and long life mines DOES NOT equal profits or returns for shareholders...

NCM has increased its reserves but those reserves are delivering ATM some but not limited to

GRoup cash flow negativity

A larger register than first planned

Lower EPS growth than forecast

Shrinking profitability

No Dividend return

Lower than forecast recovery of those reserves, production this year nothing higher than last year forecast

Higher capital requirements, despite additional capital being taken in the form of bonds, cashflow was completely off reality, and now that the ramp up is done and the additional capital sunk, production is still forecast to be flat

Higher financing costs because cashflow was inaccurately forecast and interest and borrowings were required

So imo, reserves for a business at this stage in life are not anywhere near as important or valuable as actual financial performance......Its very important you know you have plenty of them but most of the weight at this stage of the game has to be financial performance imv....

NCM has had plenty of time to perform and to capitalize on its HUGE reserves, fact is they haven't, DIV is gone, there is no surety of profit growth and they are forecasting flat production despite the increase in register and capital taken from shareholders and bond holders......

Each to their own, I just don't look at it the same way, NCM was expected to deliver $X on huge reserves and long mine life, reality if it has not delivered anywhere near expected $X......long range spread sheets are always wrong and one of the reasons NCM recently conceded that it needed to write the value of the businesses down, the huge reserves didn't deliver and the Share price has reflected actual financial delivery on the production of those HUGE reserves...