sbm vs pog

I thought I would drop the price of gold over the top of SBM to try and work out whether there is a certain POG where the market considers SBM is profitable and the price jumps suddenly.

Unfortunately I couldn't find that magic "in the money" level I was hoping for. I did find that despite the high cost of SBM production and various other issues alluded to here that SBM pretty well tracks the POG and has done for a long time.

The biggest discrepancy was during the general market slide last year - but even Lihir fell more than could be expected back then while Newcrest tracked the POG closely.

Time will tell - the recent fall was nasty - in fact one of the worst ever for SBM but I suspect that a lot of buyers don't look too closely at the company, cost of production etc. They will simply trade the sector - including SBM based on the POG.

Based on that I would expect a bounce - although I must admit that a healthy dose of skepticism needs to be applied here.