re: News: Generating returns without market r... AGO has been an...

re: News: Generating returns without market r... AGO has been an extremely difficult stock to make money out of for quite a while. Most would have to agree. When the SP gets up a bit it gives it back quickly. Good luck to Pengana if they have been short. That is easy as the SP has been weak for a long time. He is right about a couple of things but depends on how you want to read it.

AGO continues to try to resolve its use of rail unsuccessfully. This could increase ore to port in larger quantities quicker. If there is a solution, may be this year (who knows) the company should get a kick along out of it.

If the company is ramping up development in mines ($170 m out of $205 m net cashflow for Dec 13 half) of course it is not going to have free cashflow. It is important to note that it is net cashflow from operating activities versus investing activities. Alternatively development costs could be debt funded. Not preferred of course.

I don't agree that the company has a poor balance sheet. As at 30/12/2013 AGO still has $389.5 m in cash; $286 m in debt; a current market of $900 m; and heading for record production and profit. Furthermore, net assets are $1.66 B. I suppose what you don't know is how much more the company is planning on spending on mine development and the associated depreciation in the next few years. Hopefully that is limited.

I am hanging in there. I just can't see the downside being to great at 90-1.00 providing the iron price holds up. If Pegana is short at these levels that would be interesting.