Ann: Short term gold price protection , page-21

Colinchi

I am a speculator who is trying to do a short term trade here. That is not a pretty sight. I want to exit before the SHTF, so I will sell even at a loss sooner rather than later.

I am negative on SBM (as was the ratings agency which downgraded them) because I do not believe their projections.

In relation to their production costs being below the current POG you also need to note that they have other outlays which need to be met (eg admin costs, repayment of the Red Kite loan and interest payments on the $250m long term borrowing facility etc). Hence they are severely cashflow negative and the $106m in cash will not last more than one year unless they actually fix their pacific island operations by 30 June. My gut says they will fail to do so.

I suspect there is no hurry to buy shares, and my entry today was premature. There is at least one large seller judging by some of the very large single trades.

loki