IAU are still trading at less than cash backing with now only ~17 million shares on issue and with a buyback currently in force and active. Even with a modest sale price on Kitumba of say $20 million they would realise an ~$1/share capital return and you'd still be holding a company with ~$20 million cash (with your shares still backed by cash). I'm not walking away from a free option on $2.4 billion worth of Cu in the ground. Actually almost thinking of buying more. SMC and IAU are more like private companies with the levels of free float they currently have, so not for everyone. I do take your point on remoteness, although Bibra is also remote in most practical senses but if they can get grid power that is certainly a big bonus.
I suppose the point about the comparison is that if SMC can convert its resources and maintain the same higher grade resources (and if all other things are equal) they will need to process about 40% less ore to produce the same amount of gold as CMM. You'd imagine that somewhere in that grade differential there should be a cost advantage to SMC or is that just to simplistic? Maybe strip ratios, blasting and grinding characteristics, or metallurgical advantages outweigh this basic advantage? Still not a bad advantage to have as a starting point.
Nevertheless on very simple metrics SMC seems possibly a little undervalued relative to CMM, so it gives me some comfort for my continued hold.
Thanks for your comments. Esh
SMC Price at posting:
35.0¢ Sentiment: Hold Disclosure: Held
