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clock Created with Sketch. 21/01/20
11:48
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Originally posted by MIStragic:
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As a holder of and occasional critic of SLR, who has sold a lot to buy more RED, I have to give credit to SLR and "Cool Hand" (who got the moniker from a post I did several years ago). SLR has established itself as a top tier gold miner with lots of optionality due to its strategy of concentrating on its own gold resources which its talented exploration team have confirmed and expanded (despite many calls to TO near rivals whom it turns out didn't have as good ground as SLR), obsessive avoidance of debt, determined cash accumulation (such that its near 50% of RED's MC) and well chosen M&A targets which have synergistic with current operations and or provide a second growth centre) using scrip while preserving cash and tax losses ..... making SLR a certainty to grow by further M&A either as the predator or acquirer ..... SP destined for further significant growth ??? ..... as to the short mine life .... as SLR operations are predominantly underground, its my understanding that its not feasible to expand the reserves extensively by drilling - rather its partly based on drill as you go, and SLR's confidence in the geologic endowment which has lead Cool Hand to predict that Mt.Monger has decades of mine life possible ..... they have had a LOM based on reserves for years, and that continue to replace and expand production reserves ...... previously Mt.Monger was seen as a high cost producer, and hence discounted, but with the current high POG, the market has accepted that SLR is making huge margin, especially with the very low ASIC from the acquired Deflector mine and plant, the SP is been repriced substantially and looks headed to having a MC of A$2bn ???? .
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agree. SLR is being valued on their stabilised large existing production at low cash costs with optionality on the mine life extensions/reserves, but still on valuation basis seems too stretched thin(as there are limited reserves its EV/Reserve $ value metric is too high for me)
(20min delay)