Ann: June 2022 Quarterly Activities Report, page-38

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elchagie

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20/07/22

14:19

Post #: 62631009
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Originally posted by loki01: ↑

I picked some shares at $6.63 for a trade. I have no idea if that will turn out good or bad - I suppose if I hold until 2026 I will get my money back.

At this point I only read some of the key parts of the announcement, which showed an improved Pogo operation at least in terms of output and costs, so I am hoping this trend continues.

While net cash did improve by $95m, around $15m of that was due to a one off sale of assets to BC8.

I think some of the fundies are having to sell out of the goldies due to investor redemptions and will take any positive news to sell shares. Also its not clear that the USD POG will hold up if the US Fed keeps lifting rates so buying gold mining shares is quite a gamble at present. I expect the USD to continue to strengthen against the other currencies for most of this year (hopefully the AUD will weaken so that the AUD POG is maintained above $2400).

A couple of things to note from the Q-report is that costs are rising with all in costs now topping $2200/ounce so real returns are pretty skimpy due to capex/exploration etc expenditure and that the forecast FY23 gold production is only at current levels so that one needs to look a long way forward to get a reward, unless the gold price takes off (not likely in the near term). Given all the money printing due to the Covid pandemic, inflation is likely to stay high for the next 2 years so operating margins will likely continue to be squeezed, unless the gold price heads higher.

Also a falling AUD means that imported inputs such as fuel are rising for all producers and that foreign holders of Oz assets (US based in particular) see the value of their investments drop in their currencies, so its in their interest to sell out ahead of further possible loses. Given that commodity prices are weakening into a global recession and Oz relies on commodity exports for foreign exchange earnings, its highly likely that the AUD will remain weak. Finally higher interest rates across the globe (especially in north America) results in lower valuations for all assets. The US sharemarket has further to fall and that will take goldies lower, and possibly the gold price.

Other considerations are that Chindian demand for gold, at least as part of the love trade will be constrained near term:

1. India has recently lifted import duties by 5% from 7.5% to 12.5%; and
2. Chinese economic conditions have deteriorated due to lock downs and the start of the trend towards deglobalisation as well as major problems in their property sector which has represented a significant part of their past economic growth.

GLA. Keep plenty of dry powder for lower goldie prices. Will deploy more funds if NST drops to around $6.00 or the US Fed starts cutting interest rates/ends QT.

loki

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First ,
The main demand for gold always come from reserves bank around the world and after this the investors and the consumers
second ,
inflation still to high and Gold is the best hedge for inflation special USA dollar start to look like it has topped for now which is positive for Gold .
third ,
Geopolitical risk around the world special the war between Russia and Ukraine and the the potential conflict in South China Sea and China will try to get back Taiwan by force .
Russia and China trying together to find other international currency instead of USA dollar .
all the above will make the Gold in the high demand in next few years .
and it will reflect for undervalue NST share price .

Last edited by elchagie: 20/07/22

NST Price at posting: $6.85 Sentiment: Buy Disclosure: Held
16 Upvote

1 Great analysis

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(20min delay)
Last $15.16		Change 0.260(1.74%)		Mkt cap ! $17.42B

Open	High	Low	Value	Volume
$15.05	$15.38	$15.05	$77.42M	5.098M

Buyers (Bids)

No.	Vol.	Price($)
2	15658	$15.12

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Price($)	Vol.	No.
$15.18	34294	3

View Market Depth

No.	Vol.	Price($)
2	15658	15.120
2	16323	15.100
1	15658	15.090
1	66	15.080
1	15658	15.070

Price($)	Vol.	No.
15.180	33636	2
15.200	10111	1
15.220	10112	1
15.230	16858	3
15.240	15658	1

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