why are smaller gold producers being trashed.., page-2

At 100k ounces: $10 million cash flow for each $100 above costs of A$310.
At 150 k ounces: $15 million cash flow for each $100 above costs of A$310

Gold currently A$984
A$1000/ ounce: Margin $690
A$1500/ounce: Margin $1190

So DOM are starting at 100K ounces with potential to go quickly to 140K ounces.

Add the fact that the Challenger mine has to date always surprised on the upside
Add to that DOM exploration budget of 8 to 10 million dollars/ year.
Add that Peter Joseph (Chairman) holds 11 million shares
Add to that the bullish gold price environment

These figures don’t take into account deprecation, administration, tax etc
They also don’t factor in DOM forward sales.
But they are meant to show the cask generating position and potential of DOM.

There are 100 million shares so we have a good little company here.
Challenger would appear to be an exceptional mine with exceptional grades.

But to get back to your question:
Why are smaller gold producers being trashed?
Short term you also have to recognize the fact that since Jan 2006 the share price has gone from $1 to the current $5, with a high of $6.80.

So I think we need to give the market room to correct and consolidate without worrying too much.

The other problem of course is the Funds cannot see past big is beautiful
LGL and NCM are the go.
I sold Lihir @ $1.70 (market wise a mistake I suppose)
Since then they have had one disaster after another, equity issues, profit and production downgrades, landslides and yet they are currently $3.70.
LGL in particular appear to have a crap mine that never has performed to expectations,
But the market loves it.

You would think one day value may win out over size, but that’s a guess.

Anyway after a big ramble
If you want to punt the gold price, I think you could do much worse than Dominion.

I am holding.