Mainholm, I think there is much more risk than your post implies...

Mainholm, I think there is much more risk than your post implies and even in the best case I'm not sure about "huge" re-rate upwards. Your already paying nearly $700m for this business which appears to be not much better than cash flow neutral on a net basis (albeit before a couple of mines come in which appear lower cost).

Not sure about it being particularly technical. Probably some truth in it given that there is borrow available in the stock which is unusual. That doesn't necessarily cause downward pressure though. It only happens because there are large institutional holdings which are more stable and the nature of short covering tends to reduce volatility.

I certainly don't think they are positioned to ride the swings of POG!!! On contrary, Newcrest has been positioning for that by selling high cost assets to NST. Ever other miner and private investor has been avoiding these assets for the same reason. NST are very clearly positioned for POG to hold or go up with a targets sustaining cost of $1,050.

Not sure they are positioned to make huge profits either. Certainly not at todays gold prices where Paulsons profits had pretty much collapsed. Overall the new assets aren't any better.

The dangerous thing now for NST is the risk POG falls sharply. I think most likely they want to issue more stock with pro form cash only $40m and $30m available under the debt facility. My guess is that is a work in progress already, but, unfortunately, it will become more likely if POG falls.

Overall I would say that with no quarterly cash flow reporting and no cash flow guidance, its very hard to judge the strength of NST's current position. Myself, I can't help but think if those numbers were good, NST would be providing them. As they have in the past.

I'd be very wary of NST's main selling points at the moment. Low debt, well that's moving up, regular divs, they always issue more shares than they pay out in divs, and strong cash flow, that is meaningless without giving any numbers and they know it!!

If you believe like management that POG is at a cylical low, then NST will no doubt turn out to be a good investment given recent expansion. Its comes with a high price tag and a lot of risk though in my view. (Before anyone complains about the high price tag, please at least compare the value of recent private acquisitions).