Finally production is on target and costs are down.
But is there more to come?
Barricks CEO sees gold at US$1000 and Access economics see the A$ down to 56 cents due to the current account deficit likely to blow out to 9% of GDP after the chronic mismangaement of our international debt by the previous government who swandered the boom receipts of the commodities boom and doubled the foreign debt during their reign.
If these predictions come to pass, the gold would be at 1,000/.56 = A$1785 an ounce. Lets assume cost remain at A$600 then this gives the following numbers:
Based on 84000 of which 70% is unhedged at US$700that gives gross margins of 25,200 x $650 = A$16.3M.
58,800 x $1185 = A$69.7M.
That gives a gross margin of $86M and even allowing for $10M in admin expenses then that would still equate to an annual profit of $76M or roughly 19 cents per share.
The story looks good, so lets just hope they can deliver the numbers and the A$ pog does the right thing.
ALD Price at posting:
$2.04 Sentiment: LT Buy Disclosure: Held
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