Yep, the broker figures were right, and presumably they had...

Yep, the broker figures were right, and presumably they had factored in the higher input costs. You have to look at the bigger picture though- you might notice that the (only 2 brokers I might add), have factored in Dipidio into 2013 earnings- and the 2 yr average EPS is now 34. The question is what is the big picture when it comes to the NZ assets- are the costs just going to steadily increase, to the extent where Dipidio just replaces the current assets' cashflow? What is the sensitivity to POG? What is the sensitivity to the exchange rate? It's nearly impossible to tell. As I said in the previous thread, OGCs risk has significantly increased by confirming increasing costs in the longer term. Overall, none of the gold miners impressed me with their quarterlies, and I am quite bearish right now on most gold producers and I see a lot of better options out there, particularly with the way the market has treated some outstanding industrials.


Re: CGX, don't get me wrong, I am not saying to invest in it, I was only responding to Mike by saying that it is the only gold stock that I would be confident of not losing money in. That said, they have plenty of issues as well- most important of which is the SAG mill breakdown, which will negatively impact this quarter's production by ~30000 ounces. This is probably why the broker's have adjusted the earnings forecast downwards. The balance sheet is, however, very strong, and although book value is only 0.79c/share, investment in St. Augustine Copper & Gold and Ratel is carried at cost value in their books (and not at market value)- this adds ~10c/share. A further 27c/share is carried as a liability on the forward sales (treat that how you like). Because CGX is a low grade, high tonnage operation, it is much easier to forecast longer term cashflows, and minor glitches will not significantly change the big picture. This is the same reason why I think PRU will be the standout of the others once it gets operational (very big processing plant). For the smaller operators, so much has to go right to make a buck.