market cap $80 million debt $335 million, page-32

Was taking Allied a good move? Hell no! when SBM merged with Allied this time TWO YEARS ago…..their combined market value was $1b…

Now we’re less than a tenth of that market value…..for new shareholders though there is a very different risk – return trade off on offer…….i think if the gold price goes up in the next few months & sentiment changes……new shareholders will get a massive upside……but its relative to the risk they are willing to take……the risk to me is that we may have to do a cap raise around December. If we do a cap raise……the SP will temporarily take a hit but then will gap up again once the balance sheet is in order like what happened with all the goldies last year when the gold price first started to tank and most did cap raisings……

Debt % looks scary right now as SP has crashed……it will look a lot less scary when the SP recovers…………..keep in mind that the SP is not effecting their covenants ……they have enough cash to meet their interest commitments and their next principal payment is not due till Feb 2015……so they in effect have atleast till December to fix their house in order….

Their core Australian business is still profitable at current ( low) gold prices. The pacific businesses are the ones that need to be addressed but once they address them……will give them a growth profile

This is obviously only an investment to make if you think that the gold price is undervalued and will rise over the next few months……I think that is the case……to me there is high “real” inflation in the world ( exhibited through the asset price bubbles we are seeing in the US bond market & US stock market…..) and that once these correct…..gold will get back to its natural rise….

Also whilst the gold price has tumbled the last two years……taking a 5 year view….it is still up 50% ……