One thing to remember is that, gold mining companies finance a mine by either raising capital from shareholders (like MON, ie NO debt and NO obligations on gold delivery) or by borrowing money from bank. The banks then require the mine to fix delivery of gold and price (ie hedge), if like all mine start-ups there is a ramping-up production preiod which never goes to plan, then that company cannot deliver and they accumulate losses and eventully go into receivership or are forced to sell their mine. This has happened to a number of mining companing, one includes HIG.
With MON, they are NOT at the mercy of the banks and if there are some production difficulties when they are ramping-up production it just means that positive cashflows are delayed, so some patience is required.
But in the end of the day MON needs to become positive cashflow otherwie they are history.
PS I HOLD.
put a
MON Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
