SLR nadir appears to have passed, and despite the AISC's likely to remain high (compared to others) they should start to fall, and despite an increasingly bearish outlook for the POG, SLR's judicious hedging policy should be appreciated. 43% of FY18 production is hedged at $1670/oz, and this should ensure that even at an AISC of $1350, SLR is still profitable. The next quarterly report will be very interesting, and if SLR confirms guidance, then profitability will be transparently much better and a re-rating likely (?).
Can SLR go lower - sure can, if the sector is being sold down, but eventually fundamentals will assert themselves, probably through some corporate action. One way or another SLR must get its MC higher.
Meanwhile, judging from the tone of the chairman's AGM address, the board feels misunderstood and underappreciated and determined to soldier on .... and there's nothing the Hot Copper critics can do other than capitulate or surrender to FOMO and hold a SLR that's clearly better value than the SLR shares they previously purchased. I'm in the latter camp, as every other likely good horse appears to have bolted.
For all the pis & wind on HC , the vote at the AGM showed how little shares they account for - " so whats the use of worrying, it never was worth while .... " with apologies to Monty Python.
SLR Price at posting:
34.0¢ Sentiment: Buy Disclosure: Held
