Well no point asking me, most would know my answer. I only hold...

Well no point asking me, most would know my answer. I only hold two gold producers. The majority of my holdings have been in TBR for over twenty years and I more recently I've bought some RMS.

No1 TBR/RND

Highest margin gold mines in Australia. Four underground deposits are now being mined at Kundana. All four have shown excellent recent exploration potential to extend mine lives. I've got no doubt Kundana will be continued to be mined for a minimum of five years. TBR trades at (below/about) cash and gold backing at the moment and has recently increased production rates by about 40%. Only 50 million shares on issue with a current share buy back in progress which should reduce the number of shares on issue to less than 50 million in the long run. The company is now entering its cream years and will survive any gold price environment. It also has substantial unrecognised potential in Ghana where it holds the Japa project in an extremely well endowed gold belt. All profits are retained in gold bullion which I'm a big fan of. When the credit bubble eventually bursts we shall see that all that shines is gold.

No2 RMS

Seems to be well run and are developing higher grade mines that they acquired relatively cheaply. Good reasonably well diversified organic growth model with the potential for a rerate should a good exploration discovery be made. What worries me in the longer run are the relatively low grades at Magnet and the level of scalping in the market for their shares, although this has diminished recently as the US gold price fall seems to have put a floor under the share price, which probably reflects the underlying good value the company's shares at the moment.

To survive the vagrancies of the gold price you need to own Australian gold miners with no debt, at the bottom of the cost curve, that don't rely on mine plans that need to move mountains of dirt. Companies that are making money now, still growing and banking some profits.

I like NST but I think they need to find more ore at Kanowna Bell, they need to fix Plutonic and I worry that they are too dependant on Jundee for their overall gold production. The plus 1 billion market cap could be in jeopardy if Jundee stops delivering. Remember that the plus 1 billion market cap Joe Gutnick gold empire that developed the Jundee Mine fell down to earth in a ball of flames.

Eshmun