I can't tell you what price AGO will be on the ASX tomorrow. I...

I can't tell you what price AGO will be on the ASX tomorrow. I can't even tell you in which general direction the SP will move tomorrow (unlike er6n). Mr Market's random walk is unpredictable, at least to me. I can say that I think AGO is cheap at these prices and that I am a buyer at this level.

My valuation of AGO - which excludes Horizon Two assets - gives it a (rational) SP of 93 cents today, and it closed at 56 cents. So, by my numbers, today's SP values the company at roughly 60% of my NPV estimate, ceteris paribus.

However, I await the Annual Financial Report due out 28 August. I also note the Quarterly Report is due Thursday (24/7/2014) this week, which will help (a little) to clarify matters.

At last report (the March Quarterly) the company had A$372M cash at bank with "finance facilities of $104 million available." Given that AGO is cash-flow positive with cap-ex on Horizon One winding up and no substantial cap-ex on Horizon Two having been announced, I don't think AGO is going to go under either.

I don't often post on HC, but I bought a large parcel of AGO today at 57c, doubling down on my last buy which was also at 57c on 16 June. So here I am ramping away

WestCoast, it strikes me that I should be happy er6n and a myriad of others are talking down AGO and the sector. I've still a little powder dry and the more I look at AGO the more conviction I have to own it.

By the bye, I am a conservative investor and so I'm also a buyer of RIO at today's prices. I think RIO is trading at about a 20% discount to NPV (today), given the current Fe ore price. RIO is a much safer play in this space, while AGO has much more potential upside IMO. My allocation to RIO is about three times what I've got in AGO - I'm not into Atlas with all guns blazing - though I'm strongly positive on the outlook for "survivors" in this sector in the medium and long-term.