No there is probably little chance of being economic (depending how you define that personally - for me its to be a minimum of $100 above cost per oz.)
But there is damage minimisation.
Need to also consider what happens with falling POG, ie the hedge book becomes more valuable. At $1,150 for example the value of the hedge book (assuming 180k oz remaining) is roughly equivalent to their market cap at 16.5c SP ((not looking at a net asset value, just hedge value)
I know it sounds like a silly thing to say because a reducing POG reduces the long term value of their assets, and probably wipes out their viability, but it is a silver lining for shareholders to hold on to. By no means a reason to invest in it though, imo anyways.
The question is, can management determine a better way to operate at a low POG. You cannot discount this. The mine was set up at a POG and cost structure that is completely different from current envuronement...certain scenarios would not have been considered (eg much decreased throughput though with higher grade - thereby not needing expanded plant).
I have no idea whether a scenario is viable, but good management would be considering all avenues right now.
In meantime, there's only one gold stock (imminent producer) I'm happy to hold at the moment.
Cdchi1
SAR Price at posting:
16.3¢ Sentiment: None Disclosure: Not Held
