cashflow crumbling - asset values under pressure

Its pretty simple really,

here is the last reported costs per ounce to produce.



From this information you can see that Lihir and Hidden Valley are now marginal, might not be long before Boriko is pressured as well

These operations whilst producing lots of ounces, especially Lihir now make basically no cash profit

Those mines as a % of the entire forward production are HUGE, so ,in reality NCM is  a much small operation that the headline 2.3-2.4 implies

That means a large part of this 2.3-2.4M  are doing nothing for wealth creation for the company

AS the price of POG AUD is down at these levels, which are below the 1408AUD averaged last financial year, then it stands to reason that the valuations on the books are still way too high.

We also know the company has TOLD you in no uncertain terms the value of the NTA of the company is not 12.68, but now 9.68, but as the values were based on 1408 and assumptions like 80 cents for the AUD for some mines,  then with the value of the POG AUD here, the result will be more savage write-downs as they MARK TO MARKET,  so the value of NTA is actually below 9.68.

NCM wont go broke anytime soon, all it means now is that they will be drawing down on their credit lines and adding to debt  as they HOPE (as the always do) that gold will improve in value.

More draw, means higher debt, means higher interest, mean less EPS, mean Div gets pushed out even further in hypothetical forward forecasting....(which is useless nowadays as things can change on a whim at ncm as new guy does whatever it takes to maximise cash flow)

So, NCM board says NTA is 9.68, NCM board sees that cash flow is crumbling big-time, the board must see that market is currently paying more than what they said the assets are worth just a short time ago, NCM should see that the carry values with GOLD at these prices this QTR are below last years average,  meaning that they will and should write down more to make sure the accounts reflect a true and fair view of the marketplace in which it operates, ncm knowing all this and knowing that the market is paying a huge premium ATM to what it said NTA was stated at just 2 Months ago should make them think, its time to raise capital.

They have resisted the calls all the way down from when people started talking about it, at prices far far north from here, their financial position is terrible

Cash flow at NCM is going down, debt will rise as gold price lower, and so the asset values should be written down, with  more write-downs, comes more restricting costs,,,,,,,,,,,

shareholders will be camped in the waiting room for years


NCM wasn't built for 1300, 1400 or 1270 usd gold

People don't seem to be taking anything seriously, especially in the gold space,,,time will tell but I think people should be very cautious, its already trading at 14Pc over NTA,,,and NTA still has much further to fall imo with Gold prices at these levels

enjoy