Well if ever there was a confluence of benign forces around this...

Well if ever there was a confluence of benign forces around this stock, it is now. The POG continues to surge ($1515 at last glance) and for those with foreign tenements like SBL, the strong $A dollar reduces costs. They also have a bit of cash to drill deeper into the Ashanti gold belt and perhaps delineate a multi-million ounce resource over time - plus some commercial grade manganese, we hope. If the overdue drill results do not disappoint and the mill performs to expectations - preferably with an announcement about enhanced production capacity - a steady SP ascent should commence in coming weeks, despite the traditional May sell-off.

On the downside for long-term holders, this is the third capital raising in a little over 12 months. I - and many others - were led to believe that the previous one would get the company into production, and by January, not April! Each CR has come just as the SP was developing wings, but apart from muttering under my breath and firing off the odd curt email to management, I have held on. My reasoning has always been thus: eventually the EV / oz (around $40 / oz) imbalance compared to sector average (around $150 / oz) must right itself and when that occurs, the SP should advance in multiples.

The current drag on the SP, as other posters have rightly observed, is the sorely tested faith of longer term holders in management's ability to deliver. Enough of the promises already - where's the photo of that first gold bar?! Patersons will do with the shortfall shares exactly as they please, possibly depressing the SP for a week or two. If they're smart and patient, however, they may hold till production has been established and drill results are flowing once more before leaking the shares in staggered lots back onto the market. That is my hope, but not my expectation.

On balance, I see many positives in the near-term and hope that the worst of the negatives is behind. Certainly the stars appear to be aligning as the company prepares to announce first gold production with soaring gold prices, declining costs as richer ore is processed, self-funded exploration, a resource steadily growing towards the aimed 2.5m oz, and the manganese as a sweetener.

While I was bitterly disappointed at the pitiful price achieved for the last cap raising, and the craven acceptance of Patersons' revised underwriting offer, if it results in a self-funded producer that can move to 100,000 ounces production over the next three years, then I'm prepared to swallow it. 100,000 oz at $1500 / oz - even with an unlikely 50% deducted for costs - is around $75m profit per annum for a company currently valued around $60m. Factor in a conservative P/E ratio of around 8 x earnings and we're looking at a company valued at ten times its current market cap. And that's why I'm holding.

DYOR.

Gupper