LONG-term gold bugs, myself included, have been at a loss to explain why gold stock such as MCO are trading at levels when gold was $US500 an ounce not the current lofty $US1700 plus an ounce. Australia number one resources writer, the Australian's Robin Bromby, gives us a clue: Bromby points out that the only ones enjoying the fruits of the resources boom are workers,the ATO and directors. Ordinary shareholders are not getting a look-in. A case in point, he says, is Newcrest, which raised its interim dividend a miserly 2 per cent to 12 per cent despite making out like a bandit on sustained near record gold price. By contrast, he points out that during the great depression gold miners such as Homestake returned almost all profits to shareholders. In Homestake case 70c a month _ not a year. Only when miners do the right thing by shareholders will the long-waited gold share boom arrive, Bromby argues. MCO's board should consider this when it gets to divvy out revenues from its Woods' Point gold mine.
MCO Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
