43.71 is the top of the resent trading high last year.
Why it should test it, my 2 cents
Fall from the previous high was the triple failure of Gold to hold 1400 and to hold or return to its high of 1422.60.
Gold has since smashed it and had its highest weekly close in history and looks like going higher
Fridays move imo was spurred by the market update, something pretty rare at NCM, they dont manage the SP with endless releases, you get the production reports and financials twice a year and maybe the odd resource. The market update was a ripper with massive resources found.
Valuations of most of the big players are using significantly lower average gold price, hence why it poped previously to the high when Southern cross pointed out even with 1270 gold they beleived the business was worth more 65 if i recall. Expecting some upgrades but nothing too outlandish as we have to concede that the input costs have spike, OIL...but the resource find will change valuations for sure
USD is weakening again significantly, driving investment in gold as the fall will stoke domestic inflation hard (in USA), further rises in POG to 1500 seem reasonable and that price should also filter through to NCM's bottom line, a bottom line that does not have interest payments (it does but they are tiny, major credit lines remain undrawn)
Merger and development costs appear to be on track with no blowouts but savings which is good
Tension and overnight borrowings continue for the ECB, its keep gold moving forward and now there is the middle east. But to be honest I dont think the middle east tensions have actually driven golds move up much, when North Korea bombed the South korea Island and talked of was, gold shot 1358 to its high 1422.60.....this middle east seems much worse so one would have expected it to pop way higher and it hasnt, its just been a slow and steady grind up from its intra day trading low of 1308 a few weeks ago, investment demand remains strong.
QE 2 has a few more months to run and the resulting expansion in money supply has seen a rising gold price, rising gold price, rising ncm
Then there is the tungsten deposit which is also moving forward which doesnt seem to have been picked up by the market.......
NCM IS NOT subject to the Federal Governments proposed MINING tax.
So Im thinking its reasonble to assume that we are going to test the upper limit of the historical range and if gold holds above 1422.60 Im seeing a new high........and a move to some of the brokers targets of 46...
no guts no Glory! Drink beer! :))
NCM Price at posting:
$40.02 Sentiment: ST Buy Disclosure: Held
