Mulgoa I have it on very good authority that the USD POG is...

Mulgoa I have it on very good authority that the USD POG is going to USD850, the AUD will at 65 cents so that the AUD POG will be 1307/ounce, providing an operating margin of a bit under AUD300/ounce or AUD105m. From that figure one needs to deduct admin costs ($12m?), exploration ($12m?), and interest payments XXXX?.

Since their gross debt amounts to USD271m the AUD debt would be AUD417, which would require interest payment of around $36m pa, but declining as SBM pays down its Red Kite debt.

So they would be pumping out a heap of gold for very little return and would not have the money to repay the note holders in 2018.

They could pay their way until then and hope for a turnaround in POG, and I think they would generate enough cash to repay the Red Kite loan (USD75m) since they already have AUD77m in cash/bullion.

There would be no money for the mine shaft ($100-120m) or for upgrading things at Simberi to process the sulphide ores in 4 years time when the oxide ores are depleted.

Lets keep things real.

You tend to be a bit over-the-top when you are holding SBM shares and down play things when you are out.

Things do not look too good in goldieland, and likely to get worse (except for the tempting bounces).

loki (the party pooper)