I like the spreadsheets btw.Think you can get caught up too much...

I like the spreadsheets btw.

Think you can get caught up too much in the details, but if you buy at massive discounts to any valuation method you want to use its pretty safe.

I use 10% RR as its a couple of points above the interest rate but more importantly because it means you can calculate the economics of things very quickly.

Gold miners "cash costs", particularly during rampup are a load of rubbish. It is very difficult to assess exactly how these companies expense their production, but you want to see is operating cashflow trending up, if this is occurring and costs are staying down, you can be reasonably sure that the company is in sound shape. In other words, there is clearly development that is going on, but it is not reducing the overall kitty. With upcoming expenditure on Dipidio it will be really hard to work out exactly what's going on. For what is worth, over the last quarter, OGCs cash position improved by some 8 million net (12 increase in cash, 2 decrease in short-term debt and 6 increase in long-term debt).

Do a few calculations at different prices of gold, work out ROUGH estimates using company guidance (if by your balance sheet analysis they are trustworthy) and buy at a price that lets you sleep at night/ forget about it. You can do as detailed an analysis as you want, but there is no way (unless you have inside information) that your inputs will give you the accuracy you require to model accurately. DCF and NPV valuations are much more accurate on long-standing business models with stable cashflows.