I am not anti-SLR. I think it is tradeable spec goldie, but no more than that at present.
I agree with you that the Oz economy is fundamentally very weak, even if the govt does not recognise this officially. We are maintaining a high standard of living by selling off our assets to overseas interests and by borrowing from abroad. We now have a very narrow economic base, with the FIRE, govt and minerals/energy sectors holding things up - but this is inherently unstable as it relies on a property bubble/population ponzi, and to some extent commodities which are at historically high prices, and an ever expanding govt services sector that is transferring resources from private use. As long as there is continued high foreign capital inflow the AUD will remain over-valued and could go higher (as it did earlier this year), but longer term I think the AUD will fade relative to the USD, and thus make our goldies more attractive.
My main point about the AUD POG is that we need be aware of what it might do near term otherwise goldie holders could be badly hurt, as we were in 2013 when the AUD was much higher. I take your point that if the AUD POG came back to 1250 then SBM, NST and RRL would be crushed (relative to their current share prices) but at least they would continue to exist and give share holder the hope of regaining their wealth in the future via a much higher gold price. However that is not what would happen to SLR or possibly RMS since their current costs are too high. I think RSG might survive at AUD 1250 so long as they meet their projected targets, but their share price would be back to around 20 cents.
2. zog
I remember SLR directors/managers doing a couple of sales during which the six amigos (managers/directors) sold all of their options but retained a lot of shares. The second time that happened was in December 2011, while I sold around August of 2012 and foolishly did not take heed what they had done since they still had a heap of shares. see ASX notices
At the time of their selldown I had some doubt about SLR's costings but I still wanted to believe in their fairy tale and the share price once more rebounded well past my sell price to over $3.80. I made some comments here in 2011 about costs and poster nk mentioned the high cost of developing underground mines, with particular reference to another miner. Eventually I had a conversation with a mining industry analyst employed by my broker about some goldies and it was he that noted my shareholding in SLR and pointed to the worrying anomaly in SLR's costs. He suggested I confirm the issue with SLR's CFO, who eventually admitted that full mining costs were much higher (I think it was somewhere in the $350-400/ounce range but I forget the actual figure). I sold my shares as soon as I could after I ended that conversation.
I used to post a fair bit about SLR costings issues on this thread, and I made similar comments on the MML thread about their mining costs. MML eventually came around to fully disclosing all costs and its AISC now includes every cost incurred.
loki
SLR Price at posting:
32.0¢ Sentiment: None Disclosure: Not Held
