Just to add another dimension, Mr Gordon has been mentioning the...

Just to add another dimension, Mr Gordon has been mentioning the "d" word again.................. Dividends.


http://au.news.yahoo.com/thewest/business/a/-/wa/16394951/costs-take-shine-off-gold-earnings/

Costs take shine off gold earnings
Nick Sas, The West Australian
March 19, 2013, 5:39 am
The cost challenges facing WA- focused small to mid-tier gold plays were rammed home during the first half of this financial year, with eight established producers reporting a combined operational profit of just $2 million.

Despite a historically high average gold price of $US1600 ($1544) an ounce during the December half, WA's smaller miners were plagued by high cash costs. Only three out of eight companies reported positive results in their half-yearly reports.

A _WestBusiness _ survey concentrated on WA-focused, ASX-listed gold producers with a market capitalisation of less than $500 million.

Of the eight companies in that category, only Northern Star Resources banked a significant surplus, posting a $28.5 million profit for the six months to December 31.

Saracen Mineral Holdings and Ramelius Resources, which yesterday announced a strategic review, also finished in the black.

But without Northern Star's contribution, the figures from WA's smaller producers make for even more depressing reading.

Navigator Resources had the biggest loss. Its high-cost Bronzewing operation, 80km north-east of Leinster, reported a $12.6 million loss.

Focus Minerals' four operating mines in Coolgardie and Laverton were not far behind, with the company reporting a $10.8 million loss.

Norton Gold Fields, Tanami Gold and Apex Minerals - which plans to sell its Wiluna mine to China's Everprosperity Investment for $50 million - also finished in the red.

"If you look at the range of gold producers at the moment, it's a hard game in WA," Ramelius managing director Ian Gordon said yesterday. "Costs are very high."

However, Bell Potter gold analyst Stephen Thomas said producing miners should be making money.

"It's an attractive margin at the moment," Mr Thomas said. "Even if the gold price has a correction around these levels - even with high capital costs and operating costs - they should still make some good money.

"They tend to focus on growing the ounces, but I think they have to be more careful about their growth - it's got to be for an adequate return on capital because some of these results (are) unsustainable."

Mr Gordon said Ramelius had decided to embark on a strategic review of its assets because of its steadily declining share price, coinciding with a broader loss of investor interest in the sector.

Ramelius shares were worth 53¢ in January but fell as low as 30¢ earlier this month. Yesterday's news of the strategic review propelled the shares 9.5 per cent higher to 34.5¢.

"We have high-grade projects going forward, and in time they'll produce good cash flow," Mr Gordon said. "We've been telling the market that for a while now and not really getting any reaction, so we need to try something different.

"Acquisition is not necessarily the number one step though. We need to start returning value to shareholders, and that may be through . . . a dividend."