Mining is a very tough business, replacing Reserves in a timely manner to allow business growth is extremely difficult to acheive either via expl. and development or a successful aquisition. For this reason I no longer see these types of businesses as investment grade but they can offer trading opportunities when they are well beaten down by the market.
To state the obvious OZL's Earnings are falling - through lower poc, higher costs associated with underground mining, higher depreciation charges and losses from marking to market the cash held in USD.
Unfortunately the large exploration spend around PH hasn't yielded any results to date. For a business like this to grow it needs to be able to double production over a 7-10 year period. When you have a short mine life such as PH this would require essentially finding and funding two more equivalent mines over the afformentioned time period - just how feasible is that for any managemnet to achieve?
While I don't think blaming management is justified I do feel one area of just critism is in the handling of the cash on the balance sheet. The portion held in USD is earning a paltry return in fact in real terms its a negative net return.
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