I understand your skepticism MI and dividends are proof of the pudding that the business is generating surplus cash flow.
My view us they need $200million in the bank before they pay dividends, $100million for things going wrong , ie an emergency fund ( RRL needed that a few years ago if you remember when they had the pit flooding ) and $100million for M& A
We may be at that point by December 19 if the AISC forecasts for both DRM and SLR eventuate
$20t o 30million pa on exploration is good enough, then the rest can go back to shareholders
I sold a small % into this rally, but held back selling more due to the strength of the rally.
If you convert 25% of the Mt Monger resources to reserves, which is justifiable since historically around that % of production comes from resource not P & P reserve, then merged P & P reserves are around 1million ounces compare to SAR 2.5million, so lets say we should be 40% of SAR market cap which would value the merged SLR at about a buck
After that SLR will no longer outperform SAR or the other biggies unless they have exploration outperformance, that is find another 500,000 ounce ore body. Given the high prospectivity of their ground this is not unreasonable
whadda ya reckon
SLR Price at posting:
75.8¢ Sentiment: None Disclosure: Held
