Loki...I always enjoy your posts..and well pooped, however a couple of errors in your assumptions. At 850 USD / oz most gold miners in the world would struggle if not simply collapse, so it wont happen. Deutsche Bank fairly stupidly has predicted $780 US in 2015 this week (http://www.smh.com.au/business/markets/deutsche-bank-says-golds-fair-value-is-us750-an-ounce-20150727-gil4ns.html) , but also predicted 1169 US / oz for 2015 in December last year (http://www.bulliondesk.com/gold-news/focus-gold-price-to-average-1-169oz-2015-deutsche-bank-86914/). Which one is right Dear Deutsche? Their theory being that :"Gold would need to fall towards $US750 per ounce to bring prices in real terms back towards long-run historical averages," said Deutsche.
Beautifully omitting the fact that nearly every gold miner in the world would fall over at that price, so its impossible. The truth is no one actually knows, least of all Deutsche Bank who have changed their tune now several times. But on averages taking out the hysterical claims of "750-850 us oz" and the silly upside "2000 us oz" chatter, it is prudent and conservative to suggest a worst case of approx 1000 us oz as a near term future, that being a whopping 9% approx further drop from today.
And so my chart is not as you describe, "over the top" at all, what it clearly sets out is the relationship between the AUD and SBM profit. I make no claim abut the share price or value of the company , other than to explain that the FUNDAMENTALS are very very strong. The management are right on the money and debt reduced by A$73 million during the quarter to A$347 million at 30 June 2015 (you must be factoring .65 aud in your figure?) Now if they do that again it would be down to A274m next quarter, well "watch this space" for that.
But Loki, look at the cash flow! This is a HIGH MARGIN cash cow trading @ 50c approx, it wont last. And don't get me started on why the Chinese Govt dumped hundreds of tonnes of Gold on the market while simultaneously releasing a controversial report detailing a much lower holdings figure of their Gold stocks, which they had never done before btw, just as the Shanghai Composite was looking like a puddle of cold dog sick. Coincidence? I'm not into conspiracy theories, but if you wanted to head off a flight to Gold from the Shanghai I couldn't think of a better way to do it. Of course the pen pushers in the Banks and Investment advisories immediately went into shrieking canary mode to proclaim the end of Gold as we know it...LOL x 10. And that's what I like, the hysterical over reach and over sell.
Now is the time Loki where everyone gets to bite the bullet, this little cash cow is well run and under
priced, so, do you buy up now and see, or wait on the sidelines fearing POG at US850/oz?
or as Brutus would have said were he here: There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life Is bound in shallows and in miseries. On such a full sea are we now afloat, And we must take the current when it serves, Or lose our ventures. Julius Caesar Act 4, scene 3, 218–224
SBM Price at posting:
54.0¢ Sentiment: Buy Disclosure: Held
(20min delay)