Where to from here?, page-6

Not sure if you understand the business cycle @canonman. A business is valued using two factors, production and margin. RED powered ahead as the PoG increased. The margin almost doubled overnight, reflecting the doubling in SP. Unfortunately production has plateaued at around 100,000 oz pa and won’t increase until KOTH comes on line or Darlot mill expands. The PoG has moved higher but, because of ample free cash flow prompting management to peruse an aggressive exploration and development program, the margin has remained the same as AISC has also increased.
IMO there is a pent up SP price increase that will de released on the confirmation of KOTH project is active and financed. The pressure behind this pent up SP increase will grow as news of the progress of KOTHIs released.
The bottom line is don’t expect a material increase in SP without another increase in margin, driven by an increase in PoG, while production has plateaued. As I write this news of a spike in COVID-19 cases in China has been released. Let’s see what happens to the markets tonight.