I've posted before on cash flow at NST. On evidence from the...

I've posted before on cash flow at NST. On evidence from the accounts it doesn't produce cash flow even before exploration at today gold prices. There are several ways to look at it but just taking the June 13 Numbers we have:

Op Cash 65,892
less Interest 2,147
Net Op Cash 63,745
Less Capex 30,363
Less Development 16,649
Net Cash Flow
Pre Exploration 16,733

That surplus is with average AUD gold price of $1,370 and is eradicated factoring in today AUD price which is $180 less.

I can't see any suggestion of one-off costs in the 2013 numbers and subsequent quarterly numbers are in line with this analysis, as I've posted before.

Now we have the very interesting situation where they buy a mine almost identical to Paulsons and pay only $25m! That business has been marketed publicly for some time by a very competent vendor. If that's what its worth, why is NST capitalised close to $350m?

I don't think you can deny the similarities. NST themselves say the acquired mine has a very similar production profile and operation to Paulsons. The reserves, resources and mine life are all very similar. The production costs are only slightly higher. This is all set out neatly on page 4 of the presentation: http://www.asx.com.au/asxpdf/20131223/pdf/42lt8rh9q07l8r.pdf

So if NST doesn't generate any cash pre exploration at today's gold prices and you can buy an equivalent operation for $25m, why is the market cap so high?

I would appreciate if anyone can explain or point out flaws in my thinking.