GiddiyupYes i agree with your point about production costs being...

Giddiyup

Yes i agree with your point about production costs being high across the gold industry. I feel anything under a pog of 8-900 Usd per oz would be unsustainable if it endured for a medium period.

SA producers are now averaging close to 900 USD per oz on c1 alone. The 4 largest gold miners (Barrick, Goldcorp, Newmont, Newcrest) are averaging around 480 USD oz c1.

Anyone who thinks the pog can return to the pre 2006 levels is dreaming imo, its simply no longer sustainable - (its interesting to review NCM's financials around 2005, when debt was increasing etc)

I am by no means a gold bull, i can't be sure of the pog over the next 10 years but believe it is very unlikely to average under 1000 USD oz.

In an industry where companies are price takers (as opposed to a price maker) its essential to focus on those with a competitive advantage of being low cost producers.

If the pog goes to 2000+ MML will experience extraordinary margins, if on the other hand it falls i will still sleep easy.