Can STO survive, page-453

NCM went from about $43.50 to $7 (a fall of about 84%) on an underlying commodity price fall in the US dollar terms of about 33% (approx. US$1,800/oz to US$1,200/oz). In Australian dollar terms the fall in gold was only about 22%. Now gold and oil aren't the same but NCM has since recovered from its crazy lows by about 100% and I don't actually remember that it sold any significant assets through its share price plunge (please remind me if they did). What I do remember, is them developing one of the largest and most ambitious underground gold mines in Australia (Cadia Valley) during the time they were undergoing their most extreme financial stresses.

Now oil has fallen about 70% in US dollar terms and STO has fallen about 80% which just goes to show just how volatile the price of oil is compared to gold despite all the fear that the long US dollar trade crowd stirred up over gold. The same volatility is what is going to make STO such a good medium to long term trade from here in my opinion. Will it go to even crazier lows? Possibly, but there is a hard floor on the oil price which is way above the price at the moment. This floor is based on the world wide cost of production and that is what makes this such a compelling trade going forward in my opinion.

Eshmun