Why NST could be massively undervalued at current prices...., page-10

Gold is soaring tonight at USD 1342. So far up USD 16 (1.2%) or AUD 23 (1.65%).

What does this mean for NST. AISC is forecast to be AUD 1050. Gold price is currently AUD 1432
That is a margin of AUD 382 vs yesterday's margin of AUD 359, an increase of 6.4%. Imagine what happens if AISC comes below AUD 1050. Remember, NST seems to be good at under-promising and over-delivering.

Does that mean NST should also increase 6.4% tomorrow? Who knows. Tonight's increase in gold price is far more than yesterday's and NST increased 4.98% in today's trading.

If margin is AUD 382 and production will be say 700,000 ounces (using a conservative proxy of the latest announcement). We have free cash flow of $267m for FY15. Current market capitalisation is $928m, P / CF ratio is around 3.48, which is quite low for a goldie. NST is the second largest producer in Australia and NCM is trading at a much larger P / CF ratio.

I think NST has a long way to go. Let's hope the gold price rises even further overnight. Either way, upside could be huge for NST contingent on the price of gold.