tempting, page-70

There are two things going for NCM & they are the massive reserves they have in the ground, although having 40 years is a complete waste of time & the 2nd is operationally can things get any worse?

I dealt with NCM treasury over a 15 year period & for most of that time if couldn't have dealt with a more arrogant bunch of people. I also had contact with the senior management of Barrick gold & tried to introduce the two teams at a gold conference in NYK. The Newcrest guys were down right rude.

Having 80m+ ounces of reserves says to me they simply don't have enough production for their reserve base. They should be producing at least 4M toz pa if not more. they have paid far too much for assets, particularly Lihir (which is a great asset if anyone could run it!) & the Fijian assets are a dog.

Purely on a production base there are juniors out there that are half the value per ounce of Newcrest & making more money per ounce! Sure their reserves are worth quite a bit, but they are not worth anything in the ground.

On a pure production basis at the current POG I value them at $5 add in the reserves probably around $7.50. Otherwise you should be buying the likes of NST, MLX etc who have no debt & lower production costs. Someone else posted this & they were rubbished. Well on a pure valuation basis, which should be the only basis they are right.

EGO has got the better of this company as it has done for many of the majors & they are suffering as a consequence.

Sure they may be taken out by another major, but they would need to see massive upside in performance to make a buck by paying the current MC plus inheriting all the debt.