good result, page-2

re: good result (BUT) Dig a little deeper into those figure.
They produced 203,916 oz in 01/02, and made $A14.1 million net profit after tax.
This works out to $A69.15/oz, or $US38.03/oz at a 0.55 exchange rate.
Their cash costs were $US205/oz, and they sold at $US303/oz, a difference of $US98/oz.
Thus their hidden costs (depreciation, amortization, tax, ...) is close to $US60/oz.

Now consider their forecast for 02/03.
They expect to mine 200,000 oz at cash cost $US240.
Add on the hidden costs and they receive POG-$US300/oz.

Assume the price of gold averages say $US320, they will make $US4 million profit after tax.
This works out to less than 4c Australian per share (assuming 155 million shares) and that's not counting the 50 million options exercisable at 80c.

I'm thinking hard about getting out. Luckily it's only a small part of my gold portfolio.

A final word - if gold shoots up more - every $20 rise would be another $US4 million profit.
But also vice-versa.
PS - are they hedged? I have no data.
[Added after - just checked. Half of '02 hedged at $US300; a quarter of '03 production. I AM getting out.]