I agree its best to hold goldies for mid term gains in a yearly cycle and then be out. I tend to exit them when the downswing is happening due to a lack of foresight and TA training. Let us know when you are exiting the goldies as a group because of expectations of significant gold price peak having passed. I can not say that I would act on what you do but it would be of interest to me given your TA skills. I rely on a host of subscriptions and free literature in reaching a view when to exit, as well as gold price action.
SBM has not had any success in its exploration outside of Gwalia deeps, and has stated it is looking for other opportunities. They know if they fail to develop/buy other mines/deposits then the company probably only has about 8-10 years left. They have the unfortunate history of buying very poorly performing assets from ALD (Simberi and Gold Ridge) at the last peak of the gold cycle, going heavily into debt and losing most of this investment (Gold Ridge was sold for $1 to the local community). Given the current robust cashflow they should be able to do something positive to extend the company's future.
Closing Simberi would reduce their production to around 260k ounces pa (from around 360-370 k ozs), and given the higher operational costs as they go deeper at Gwalia I very much doubt the share price of $2.60 would be maintained at the current gold price by operating just one mine.
loki
SBM Price at posting:
$2.63 Sentiment: None Disclosure: Held
(20min delay)
