bear back of the envelope

what have I got?:

Gold 1172 USD, AUD POG 1332
AUD FX 89
Oil 80.5
Silver 16.11
Copper 3.05usd

Lihir last reported cost to produce and ounce of Gold from processing stockpiles $1353  (imagine if they were actually mining normally with trucks and movements and sustaining capex, would be much higher)

1353 Cost per ounce to produce
Sell if for 1332 aud
MMMM now that would be a loss
That's a negative impact on cashflow for the group

Costs for group forecast to rise according to the last report

Guidance Maintained 2.2-2.4M OZ to be produced this year....ok
Lihir forecast to produce 700-740K oz this year.

Lihir as a % of total group forecast production (740/2400) = 31%
so 31% of the entire production is now producing at a loss, and producing at a loss when its processing 93 Pc of stockpiles as the normal mining has been scaled back due to high costs = bad, very bad

Value of Lihir last report 5391M,,,,producing an EBIT of 132M - so that is definitely needing a BIG BIG  further write down as the carry value is still ABSURD,  and given that the mine now produces an ounce of gold at more than it can sell it for,,,it should be marked down now not in 30/6/2015.....

Telfer carry value is with AUD at 80 cents, its at 89 and climbing, so that carry value is absurd

Last report they just WROTE UP their investment in EVN,,,,,,,,,opps that needs to be reversed and then some

Cadia could get a write up, but given its costs are low as it gets the benefit of being in "ramp up" will have to wait to see a few QTRs of production to see what the real costs are there

That means?  no div for shareholders in DEC, not unless they borrow some money LOL

Credit rating agencies must be asleep if they don't put it on negative watch for possible downgrade formally to junk with its debt position, cash position, cashflow position

Negative cashflow at lihir drains the positive nature of the other mines and makes it much harder to make its debt obligations.

BUY recommendations in October
Well there were quite a few recommendations coming out in OCT

• Morninstar,,,still looking for 22.......
• CIMB came out and cranked a big buy after Cadia inspection Day
• Citi bank at low tens said BUY BUY BUY
• and Comm bank came out , "overweight" at 9.90's and even reiterated their call on Thursday, Options expiry day....

EPS, forecast constantly upgraded as gold spiked 1380aud to 1422aud are now way way way over ambitious, especially as costs due to rise, NCM has held up relatively well over the last week despite the HUI and GDX indexes, probably with all these major BUY calls, this is reverse imo big time

Last time gold was at this AUD price, NCM was hitting a low of 696

Beginning of the year AUD pog 1350, NCM 7.80, which was spiked up from 696 in the santa rally as fold went 1183-1200USD.....so expecting 7.80 in the near term as some leverage get pounded and some big stops get hit.

"new management" on the nose already with a FIRST STRIKE at its AGM yesterday,


DEBT - 4BLN approx. at 92 USD/AUD,,,AUD now 89, so that higher when retrainslated and is simply too high for a company producing 432M "underlying"

back of the envelope  says 733M shares on issue in a company with crap cashflow, major parts of its production producing at a loss, no div in sight., huge gearing and high debt to equity......she goes lower to test 696 imo

What is amazing is how the shorts outstanding have been falling heavily over the last couple of weeks to being less than one % of the outstanding issue, maybe a lot of people were expecting a mega market collapse and Gold to skyrocket........AGAIN.........

Cant wait to see all the leverage from the punters to the hedge funds start to unravel in this one..........

Interesting there were major major on day % gains in the daily moves  up from 7.8-9.53 so expecting to see those big daily up spikes reverse in the same time frames.

Cant wait to hear, oversold, takeover target, reserves ,be greedy when others a fearful on Monday...

Good luck, , $10 round number gone NCM been held up by resent buy calls, resent reiteration of those calls but she overdue for a big correction to match its peers..

733M shares and only one exit,,,,sweet, will be great viewing Monday,,all those STRONG hands at work......