norton the next big goldplayer, page-6

The hedging fiasco with Lehmans and the protracted litigation drove investors away from NGF. The debt is still a bit of millstone round their neck, although with profitable production of 155k oz this year and the further tranche from the coal asset sales, the debt should be reduced substantially by this time next year. There is a safety valve in the debt too, because they have a period of 4 years in which to repay it if necessary, but I hope that they will make debt repayment a priority and become debt-free asap.

If you run the numbers of NGF compared to any other Australian gold producer, I believe that NGF comes out as the best value on the market. Very few producers with 150+ k oz production, 5m+ resources, and 1m+ reserves. Add in the number of shares on issue and the share price (mkt cap) to the comparison, and NGF is a stand-out.

Despite their relatively high production cost, they are making a significant profit at $1,400+ per ounce, and some of the gold producers around the world who are having to dig much deeper (esp. in South Africa) have costs considerably higher than NGF, and are still operating at a profit. Improved grades, reduced haulage costs and increased production should enable NGF to get their costs down to a highly profitable level. Mt. Morgan will be an added bonus when it gets into production.