how fortunes are made ..., page-38

Ophir, I have not said that these acquisitions are not good buys or didn't mean too anyway. Just that I doubt they are absolute steals given that they were publicly marketed and the seller was not distressed. Sure, NST management seem to know a bit about the mines but from some years ago. Barrick know plenty about the mines as well and they are selling them as part of a stated strategy to increase cash flow. That is in line with what I see at NST at today's AUD gold price which is fairly limited cash generation. The fact they are raising so much extra cash also fits with my idea, particularly given they call it working capital. (It could still be they just want cash for further acquisitions, or as a buffer against further gold price falls but it remains true that they are happy to sell pile of shares at 86c).

NST management performed very well but they appeared to have a honeymoon period early in the mines life and then gold price shot pretty high. It was all well done but when the dust settled and gold came back, NST was left trading at a value of around $350m which to me is too high. That is backed up by what they have now paid for similar assets.

I'm not a disgruntled ex shareholder of anything! I am currently short NST which inevitably gives me a negative bias, the same as holders have a positive one. I do however try hard to post just what I think and will likely continue to post after I have covered. I don't believe as some seem to that individual posts on hotcopper have an impact on stock prices. Although obviously hotcopper has been utilised as a tool to promote stocks such as CCC which ended up accumulating 10,000 small holders for poor 3rd tier South African coal mines. There is some sort of mass delusion thing which is interesting to watch.

Although hotcopperites often don't like it, I do find it hard not to point out perceived anomalies where I see them. I may be wrong in my idea about he valuation of NST. Valuation is the most difficult part of stock trading, particularly in the short term where there is a good story to tell. I am very sure though that NST has set those cash flow targets, reset them, missed them again and now doesn't talk about them. Sure, its party because gold prices have kept falling but investors should ask cash flow questions and demand quarterly cash flow reporting in my view.