With gold at current highs, real inflation set to rise in the US and much of the developed world as Governments lose the value of their fiat currency via the indulgent spending 'stimulus packages'. The currency values will lose their inherent value as a consequence and many investors seeing the fall in the worth of major currencies, together with the burgeoning government debt levels, will buy Gold and Silver as a hedge and safety strategy until markets show signs of recovery.
Isn't if better then that OZL retain their gold producing operations, pay no dividends, (for the time being), and finance capex expenditure & debt commitments through cash flow generated by the now operational gold, silver and copper producing operations.
OZL need to bring the company back into a strong cash flow position, pay off it's debts obligations and bring about a shift in value enhancing strategies that the shareholders are made aware of through frequent ASX releases.
Currently, OZL is a "fat horse" that needs to be turned into a racing thoroughbred . It burned too much cash throughout 2008 on pointless exploration, keeping Century going at a loss, and financed expansion in areas that were just not well timed with the market demand. 3.3 billion shares on issue is way in excess of a company this size.
Keep the gold operations, Averbury and sell Century to a Chinese interest to pay off current debt obligations. Gold will stay in favour for a few years more before their is any significant turnaround in the the world economy.
An alternative option would be for Michelmore to do a "RIO deal" and get their foot in the door so to speak with big demand from the Chinese.
They're my thoughts on the current situation. Let's hope the executive team get some timely advice from expert consultants.
OZL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
