gold - this should be flying, page-51

$10 a share is a market cap of say $2billion after dilution

using a price of AUS$3000 ounce gold we get( assuming annual production hits 150,000 pa in a coupe of years)
150,000 @ $2000 margin per ounce equals $300millionprofit pa pre tax or $200 million after tax

10 times that is $2billion

in the dot com days companies came close to this market cap with NO earnings

This outcome is achievable, though because it seems far fetched few will believe it. I remember Alf Field, a brilliant Elliot Wave technical gold guy, saying that 6 years ago he felt gold would go to $6000, but of course never disclosed that because people would think he was nuts.

However one should remember:

-SLR and other quality gold stocks are still trading at substanial discounts to NPV based on AUS$1200 gold, what we have now is massive leverage due to the massive discount already existing

-as the gold price rises previouly uneconomic ore becomes payable. This is dramatic at prices over AUS$2000

-Gold stocks will dominate the corporate landscape over the next few years.Their monsterous cash flows will be used by astute management to create corporate powerhouses. WMC rose to fortune on the back of the kambalda nickel finds in the 1960's, BHP from the silver profits at Broken Hill reinvested in iron/steel

-Currently 99% of investors are clueless to the almighty mess unfolding, the greatest financial panic and collapse in world history. Currencies, countries , economies and societies will be torn apart. Gold stock owners will be among the few that thrive in the unfolding nightmare

thats the way I see it. i'm not interested in converted gold bears to the cause, which would be like converting an Eagles supporter to the Dockers. Impossible unless the eagles folded up.

Gold is the gogo place for the next few years. I'm diversified across 10 gold stocks, 85% of those stocks are Oz/canada mines/prospects. Stay out of big chunks of Africa, China and South America, or book profits as soon as you can get your capital back if you insist on staying there. "Sovereign Risk' is about to reach a new dimension in my view.

In the exponential blow off you cant call the price on SLR. Just sell the rally. Its in 2011