gold & producers up ... mun down 12%, page-6

Thompsjz69 I resent your accusation. If I was posting under my own name you'd be making a quick retraction or else .....

My investment strategy is NOT buying into small gold producers with issues.

Now I hope MUN succeeds big time, but I won't look back and regret selling. There's no point looking at the past with what haves and should haves. What's done is done.

The hardest thing is to accept that things haven't worked out the way you expected and to take a loss. That's why you see on forums bullish posts in threads about an individual stock all the way down as it falls from its peak to its lows or sometimes worse.

I'll put it very simply.

1. MUN is only producing a small amount of gold.

2. This gold production has been significantly below pre mining estimates of 8,500 ounces a quarter.

3. The cash cost of production last quarter of AUD751 was AUD426 higher than pre mining estimates. The true cost of production is usually significantly higher than cash cost.

4. There is nothing exciting, should it occur, about MUN's anticipated production increase in 2010.

5. MUN appears to be cash strapped, with less than one million in cash at 30th. September, over 12 months since first starting mining. I hardly call that rolling in cash in the current environment.

6. MUN spent slightly more money in the September quarter than MUN received.

7 MUN has been aiming to operate within its means, which means nearly all MUN's cash flow goes to paying MUN's bills for gold production, suppliers and employees.

8. The amount of drilling MUN is doing appears to be at a snail's pace. Compare with eg PRU. MUN even prudently ceased exploration drilling at one stage last year in an effort to conserve cash.

9. Were it not for financial support from MUN's major shareholder last year I shudder to think what would have happend to MUN with the gold grade/production issues MUN encountered not long after starting mining at Engenho.

Thompsjz69 I don't buy into very small, highish cost, low cashed up, junior gold producers.

The market believed as a result of MUN's announcements to the ASX that Engenho was going to be a low cost, very profitable gold mining operation based on just US$750 gold!!!

A beaut little earner with cash costs at a token AUD325. A beaut little earner that would give MUN plenty of free cash and enable MUN to carry out a very active exploration programme.

After ample time, the reality now is far from that.

Once again, for shareholders sticking with MUN, I wish you all the best.