A Golden 2013, page-8

Venturex DFS was out this morning. The figures look quite good with potential for upside, however the market reacted negatively taking 14% off the value of VXR (for NST’s 15% share this is about $1m loss of the value of investment). This does not justify a loss of $57m in market capitalisation for NST today considering consistently positive NST announcements.

The latest announcement on 12 Dec states the NST is poised for a lucrative CY 2013:
• Head grade to increase from 7.0gpt to 8.5gpt underpinned by outstanding drilling results for Voyager 1 and Voyager 2 lodes. The JORC resource likely to increase substantially with improved grades and some resources to become reserves.
• Expanded plant to generate between 100,000 to 115,000 oz of gold production (up from 80,000 oz). Set to add another 100,000 oz in production for Ashburton.
• Cash surplus forecast to be between $65m to $85m for CY 2013 (assuming gold price of $1,550 per oz)
• Tonnage records consistently being exceeded (September record exceeded in October by 29%)
• Savings are greater than 13% budget (YTD Nov 12) due to bringing mining services in-house
• Low total operating costs of $850 to $950 per oz (costs have reduced significantly since NST’s ownership of Paulsens)
• Dividends are now being paid
• Similar style results to Voyager 1 and 2 may exist in adjacent Gabbros. Results to date are very promising (up to 113 gpt)

This is great news that is usually met with an overall increase in share price. NST is now sitting at $1.315 (17% lower than the $1.585 high on 26 Nov). Definitely not justified.

I can see a turnaround tomorrow or very soon after. The gold spot price is up over to US $1700 per ounce whilst the Australian dollar is trading stronger relative to the USD. This equates to an improvement in the AUD gold spot price (currently sitting at over $1,615 per oz, well above NST’s forecast for CY 2013 of $1,550.

GLTA