One thing to be taken from this latest announcement is the projected profit for the 2013 financial year of $50 million based on producing 100k ozs at a gold price of $1500 an oz. This means for every $10 increase in the gold price $1million goes straight to the bottom line. At the current gold price that profit is $60million. It's not hard to see the gold price moving substantialy higher over the next 12 months. A price of $2000 an oz doubles that projected profit. I'm not saying this will happen but it bears thinking about. This sort of exponential increase in profit is possible for all producers and why invest in a gold miner if you don't believe the price of gold will increase. If the price were to stagnate or fall with costs increasing it would make for a very poor investment.
Basically the gold miners have huge potential if the gold price continues to increase. It doesn't have to go to $5k or $10k. As shown above $2k will double the profit of IGR and that would have to move the share price.
IGR Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
