Ann: Investor Presentation - August 2018, page-13

Hey Flaming. Might write a more detailed note over the weekend. On the fly atm so forgive the rushed answer. I feel really bullish with AUS gold stocks. As long as they have cash and no debt and can make money above AUD of $140. And am looking to add to my position next week with SLR. Hindsight is infinite and can be annoying trap. You always probed just see the negative, or what perfection could have looked like. Rather than what you did well. Yeah would be nice if I sold at $65 and was buying in again now at $50. But you play the ball in front of you. So in that sense;
- 0.50c for SLR is great buying value. And has held up really nicely. $150m in cash in 12 months. No debt. And can still make money with AUS GP at $1400. And with GP depressed might snag a deal at acquiring something O/S if GP falls further
- USD GP will travel sideways and probably down for short term. Longer term will bounce back. And very confident. 99% fall correlated with USD going up. Nothing systemic. Interest rates are driving USD up. And more recently USD/USD assets treated as a safe haven (China and Turkey). Economic headwinds will hit US early next year. 2018 Tax reform benefit becomes normalised. Equities looking high. Oil prices staying higher than expected. Inflation will creep in. Then US will be in a little trouble. What to do. Dropping rates will send inflation up. Holding rates up will add economic pressure. Who is going to buy bonds with QE tapering to pay off the >$20 trillion.
- USD will tank. Golds inverse relationship will shoot up. And sure, that means that AUD will strengthen and neutralise GP gains. But for the fact that record short positions on Gold means when this sparks in the other direction, GP will move hard/er and faster. And a lot of US money will pile into AUS stocks, especially if AUD is depressed at c.70c and looking to rise. Plus AUD has its own downward pressure outside of USD index. China economy is one impact and my belief that RBA will need to reduce rates next year based on local economy. Or very least RBA will extend rhetoric to end of 2020 at least before a rate rise
- I stand by my call of $1 to $1.20 by May 2019 for SLR