SLR has lower all in cost than most of majors at consolidated level....
So I think there will be an excellent opportunity but we just need to see POG bottom first. The majors (Barrick, Newcrest etc) need the gold price to be above $1350/oz to maintain existing production profiles. ST it could go below the magic $1200/oz for a unknown period of time and so will all the share prices as balance sheets come under further pressure with negative cash flows and impairments.
Chinese demand for the stuff has only accelerated and LT to cost of production from new mines are going up (lower grades, deeper mines). Very difficult short term trade as so many instos are negative on gold price. Long term getting involved in a company that has lower average cost of production, long mine life and strong cash balance should see a decent upside. A well regard broker reckons once NCM does a heavily discounted rights issue this will flag the bottom of the market.
In at close today but as always I won’t let any trade become a big loss (rather just a manageable little one).
p.s. yes the majors have certain lower cost mines than SLR but all they'll still need circa US$1350 to sustain existing product.
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