re: Ann: Northern Star to Become the 2nd Larg... Chuk there was...

re: Ann: Northern Star to Become the 2nd Larg... Chuk there was mention of some one off costs in the last quarter, albeit only small. I'm assuming that there will be other costs to reduce staff and for other initiatives at the acquired mines. Remember they have given no cash flow forecasts you have to guess yourself at the moment. Investor really should be demanding guidance on cash flow before providing any more cash (and holding them to it) but I bet they don't!

Of course, it not just one of costs that may lead to a cap raising. Newmont said they were selling the mines to improve cash flow. That, combined with the low sales prices, suggests to me that they are currently cash flow users and need some expenditure to reduce costs and extend mines lives.

However, the main reason I believe they will issue is to have a bigger buffer against falling gold prices or any operational set backs. It would just be prudent. It would also mean they still have flexibility to acquire. They seem to like that. There will probably be more opportunities at they appear to be the only buyer of these older, higher cost Australian mines.

Of course, if you really believe they will generate $50m cash a quarter before one off expenses, then they will be fine. Obviously I don't believe that as I can't reconcile their sustainable margin numbers and cash flow historically.

I certainly wouldn't exclude equity issuance because it hasn't happened already. Experience with ASX companies suggests that cap raising can come at any time and for any amount. Normally a lot more than you expect! Its normally very hard to predict timing but I am relatively confident that they will be talking to investors right now. The delay could be for many reasons. The obvious one is that they didn't want to tell selected investors about this transaction.

Anyway, thanks for engaging with me on this chuk without the usual animosity that critical posters face. I don't disagree with anything you say. Its just your telling the company story and I'm just more skeptical about it. Of course we also have different views on the gold price. If I was a big gold bull, I would possibly buy NST here despite my skepticism. There is just so much leverage to pog. Although I would do so cautiously. Probably pausing here for a cap raising and avoiding exposure around half and full year reports.