Talking about gold companies and their relevant share prices, it...

Talking about gold companies and their relevant share prices, it all comes back to underlying profit and potential future profits and dividends ( although this isn't as big a thing in the mining sector). So when I invest in any company it's all about profit. Now the gold price does tend to react to certain demand and supply factors. It appears whenever trade tensions happen there is a movement of liquidity into gold and gold stocks/etf's and with increased demand the price goes up because there is a finite supply. This then effects profitability of gold mining companies so they become more desirable and their price rises. There are probably dozens of other examples I could think of that effect the gold price. So I try to keep my thoughts focussed on profit and future profit to determine if I think a share is good value and take gold price into account. How do I see SAR in relation to this, well I used to look at SAR as my least risky gold stock but not any more as I see risk in this acquisition without a full level of value one would expect if an investment had risk. Funny enough I now see RMS as my safest gold stock and recent valuations would indicate it is on or above fair value so I will not be topping up further until it drops below $1. With SAR I believe today's 10% haircut was probably a fair response as it takes on more risk and a big slice of debt, with the offer price at 2.95 that is starting to look more like value for risk but I am still undecided if I will participate. One of my stocks which appears on the surface undervalued but has inherent risk is RSG. I believe that it's recent pull back provides value as it moves closer to derisking itself once Syama is running properly . Good luck and hope you decide carefully how big an appetite for risk you have and take these factors into consideration when making your own decisions on whether SAR is value.



Christopher