pog is out of sync with costs, page-32

firdy

That's my thinking exactly -

Juniors that will become low cost producers with big or growing resources -
I'm aiming for cash costs of $350/oz or lower.

But there's 3 more boxes they have to tick for me -

1. they must carry no Debt

2. They must have the plant and equipment to start mining.

3. They must have a mining licence and have started to mine.


Why look for ones with no no Debt ?

Let's say you've done your homework and you find a couple of good candidates and ignore their debt levels - at the EBIT stage the debt interest may take another $100/oz or more away. This adds $100/oz or more to the production costs which looked cheap.

also the ones with no debt wont need to capital raise - especially if they have started to produce and have a positive cash flow.

I cant believe the indiscriminate carnage that has happened to gold stocks with both low cost and high cost producers being hit.
Low cost producers should have escaped.

amongst this carnage I believe I have found 2 low cap juniors owning all their necessary plant and equipment and that are starting to produce with no debt.
So hopefully one good thing has come out of it - the future will show whether this is the case.