Hercules - Did not get to see the full Ord Minnett article only the extract posted on the SLR threads. I did not see what their predictions for the gold price were.
For many reasons I hope gold does hold up well for some time yet and that the SLR SP does hit $5 in the near future. It will make the 0.0882 shares per 1 PRH share look better value than it ended up after todays trading.
However, if we look out to 2016 and perhaps by then the easing of global economic uncertainty and the passage of a period of inflationary catch up, we could see a big sell off in gold to assets that actually provide a guaranteed return on capital. This might be four years away or even less. In the mean time the cost pressure of mining and producing gold will have increased.
So who knows when the current boom cycle will head into the gloom phase for the gold miners. We know it will happen as sure as night follows day.
Mind you I think one of the attractions of SLR aquiring Phillips River is that it will give them some sensible diversity with silver, copper, zinc & lead. SLR could also farm some wheat on the freehold Myamba farm as well!
The more I think about SLR's offer the more I think PRH share holders should think about ways to save their Company instead of accepting the opportunistic low pitch offer.
PRH Price at posting:
2.4¢ Sentiment: Hold Disclosure: Held
