Gold stocks

Profitseeker · 5 May 2006

YOUNG_TRADER said:
lol, I'm actually looking to sell the car n get a Boxster S or Merc SLK 350,

Back on gold, I am looking @ LHG now, can't go back to BDG just yet, production is so far away (proper levels anyway won't be achieved until 2008)

"The Company forecasts first gold production by June 2006, from the south mine at a rate of 120,000 ounces of gold a year. "

That is still a lot of gold to be selling unhedged into today's gold market. I really like BDG. They have lots of potential to upgrade their resources and even be taken over.

nizar · 6 May 2006

Re: GOLD Where is it heading?

Profitseeker said:
You should look at adding some BDG!

Why would u want to do that?

LHG provides far better leverage to rising price of gold

Compare the movements of gold and LHG and BDG and see which one moves better - its LHG

120koz p.a is a joke, LHG is 670koz and 800koz... yeh people say its hedged but the hedging is only 30% of those figures, the rest delivered to spot market

I hold LHG

rederob · 6 May 2006

Re: GOLD Where is it heading?

nizar said:
120koz p.a is a joke, LHG is 670koz and 800koz... yeh people say its hedged but the hedging is only 30% of those figures, the rest delivered to spot market

nizar
I too hold LHG, and its hedge position has improved but is, nevertheless, diabolical.
In 2006 LHG will deliver 206.5koz into hedges at an average of US$330 - which is less than half the present spot price and is a loss of over US$70m at prevailing spot prices.
The reason I have been keen on OXR for some years is that Hegarty worked out that hedging was a losing game, full stop. If a mine cannot make a profit without hedging, it probably should not be mining in the first place.
That said, LHG will still produce over twice as much "unhedged" gold as OXR in 2006, with relatively similar profit margins per ounce: That's why LHG is such a good gold equity to own.
Given that Bendigo Mining has yet to produce any gold, and its costs per ounce remain unknown, I prefer to stick with producers that deal transparently on hedge positions (if they have any at all).

nizar · 6 May 2006

Re: GOLD Where is it heading?

Hegarty worked out that hedging was a losing game

Maybe so but some companies need hedging to secure finance eg. SBM

I still have the view that LHG provides much better leverage to rising gold price, they will benefit most due to sheer size of production

Thanks for your thoughts rederob, i was actually not aware at the price LHG had hedged on, thats quite shocking US$330...

Are next years hedged production also at $US330 ?

LHG will still produce over twice as much "unhedged" gold as OXR in 2006, with relatively similar profit margins per ounce

I wish it was so, from their quarterly reports, LHG cash costs per oz was US$276 and OXR sepon gold cash costs BLEW OUT from an already expensive US$350 and last quarter they were US$550.... of course probably no one at the OXR AGM questioned Hegarty on it coz they were too busy kissing his a$$... who cares if gold contributes only 10% to their earnings, costs blow outs like that still need to be questioned IMO...

Sean K · 6 May 2006

Re: GOLD Where is it heading?

Be weary of any one mine producer. Lihir hasn't a great record of getting it right. Nor has it been lucky. I bought this at 80c and have been holding my breath the whole time. Would be happier if a multinational took it over, but the PNG gov wouldn't allow that. Lihir will be one of the ones to fall the most on the next decent correction I reckon. But perhaps, that will be another buying opportunity.

rederob · 6 May 2006

Re: GOLD Where is it heading?

nizar said:
I wish it was so, from their quarterly reports, LHG cash costs per oz was US$276 and OXR sepon gold cash costs BLEW OUT from an already expensive US$350 and last quarter they were US$550....

nizar
I have LHG with total cash cost at US$340 and OXR at $348 for the March 2006 quarter.
Can you please double check your data as I have cut and pasted as per below.

From Lihir's March Quarter Report: Cost discipline maintained with gross cash costs of $340 per ounce for the first quarter.

from Oxiana's March Quarter Report: Costs
Total cash costs for the quarter were higher at $348/oz reflecting the impacts of the changes in mine plan.

nizar · 6 May 2006

Re: GOLD Where is it heading?

rederob

look at page 1 and page 3 of the LHG report 1st quarter activities dated 24/4, i dont know how to cut and paste from pdf, page 1 its on left hand side the 4th dot point and on page 3 on the bottom right

also wats the difference btw gross cash costs and total cash costs, i noticed gross cash costs is the figure of $340 as quoted by you

for OXR hmmm i cant seem to find it now u seem to be spot on with $348... maybe u were right after all sorry about the misunderstanding... i mustve read 550 somewhere.... but.... hmmm cant seem to find it now, i kicked up a big fuss over at S/S about this also.....

rederob · 6 May 2006

Re: GOLD Where is it heading?

nizar said:
also wats the difference btw gross cash costs and total cash costs, i noticed gross cash costs is the figure of $340 as quoted by you

nizar
One needs to check each company's reports to see what they include or exclude.
There are no shortcuts as companies may use different terminology and different rules to account for costs, akthough ultimately the discrete items are usually identified somewhere.
Plain "cash cost" is easiest to use, but can obscure a multitude of sins elsewhere buried in the totality of production costs.

Profitseeker · 7 May 2006

Re: GOLD Where is it heading?

nizar said:
Why would u want to do that?

LHG provides far better leverage to rising price of gold

Compare the movements of gold and LHG and BDG and see which one moves better - its LHG

120koz p.a is a joke, LHG is 670koz and 800koz... yeh people say its hedged but the hedging is only 30% of those figures, the rest delivered to spot market

I hold LHG

Hi Nizar,

I do recognise LHG as a good play on the price of Gold. However if you are just buying a company to play the price of Gold then you might as well buy Gold. I think what you get with BDG over LHG is:

- Bdg is a stronger take over target. i don't personally think LHG is.
- BDG has bigger potential to upgrade existing reserves
- BDG presents less risk if there is a correction in commodity prices
- BDG operates in a country with low instability.
- People will start buying in to BDg in anticipation of it being a producer in June.

crackaton · 7 May 2006

Re: GOLD Where is it heading?

Profitseeker said:
Hi Nizar,

I do recognise LHG as a good play on the price of Gold. However if you are just buying a company to play the price of Gold then you might as well buy Gold. I think what you get with BDG over LHG is:

- Bdg is a stronger take over target. i don't personally think LHG is.
- BDG has bigger potential to upgrade existing reserves
- BDG presents less risk if there is a correction in commodity prices
- BDG operates in a country with low instability.
- People will start buying in to BDg in anticipation of it being a producer in June.

Of course, but I think this has already been factored in to the price. BGF is the same. The only way these will spike is take-over. Just my opinion.

rederob · 7 May 2006

Re: GOLD Where is it heading?

Profitseeker said:
I do recognise LHG as a good play on the price of Gold. However if you are just buying a company to play the price of Gold then you might as well buy Gold.

Is that a silly, silly, or silly idea?
You could have got onto LHG for a dollar one year ago.
LHG is now over $3 and gold has incresed in price by how much in the same period?
Bullion and equities "cycle" separately, so it is possible to have a foot in each camp and step heavier or lighter in time with their cycles.
But percentage gains in the better gold equities (ie the mostly unhedged ones) will continue to outstrip POG gains going forward.

Profitseeker · 7 May 2006

Re: GOLD Where is it heading?

rederob said:
Is that a silly, silly, or silly idea?
You could have got onto LHG for a dollar one year .
LHG is now over $3 and gold has incresed in price by how much in the same period?
Bullion and equities "cycle" separately, so it is possible to have a foot in each camp and step heavier or lighter in time with their cycles.
But percentage gains in the better gold equities (ie the mostly unhedged ones) will continue to outstrip POG gains going forward.

I am not discounting LHG or what it has done in the past. I am triyng to look at where i will get value moving forward and protect myself from a correction in the price of the gold if it happens( i hope it does not). Also bear in mind that BDG was about 90c a year ago. That is still a good return in anyones book.

stockmaster · 26 June 2006

Gold Price

Price for gold has been up and down for the last 2 months, is it time for it jump back and start its new rally and reaching its predict price of 1000/ounce?

LHG & OXR are both major gold company, however OXR has jumped over LHG in term of capital for the past few months, what caused this movement and however LHG react to this change? Strategical review? Any prediction one the price for LHG and OXR for the next one month?

Sean K · 26 June 2006

Re: Gold Price - Where is it heading?

I thought your name was 'stockmaster'. You should be telling us!

The answer to the question is your guess is as good as anyone elses. It could go anywhere in a month.

My guess is sideways, consolidating under $600.

But, really, anything could happen around the world. Interest rates, Korea launching missiles over Japan, Israel declaring war on Palestine, World Cup, Iran playing chicken with NATO, and JI launching another bombing raid in Bali could all effect the markets. Or not.

Out from the next month though, it's going UP!

I'll be buying more LHG, NCM, PSV and maybe BDG.

stockmaster · 26 June 2006

Comparison

The three main gold companies that i have observed which has a potential in raising for the next few months are LHG, OXR, BSG in the respective order. Any suggestion for its price in the next few months.

RichKid · 27 June 2006

Re: Comparison

stockmaster said:
The three main gold companies that i have observed which has a potential in raising for the next few months are LHG, OXR, BSG in the respective order. Any suggestion for its price in the next few months.

Hello stockmaster,
This thread is for general discussion and comparisons of gold stocks, some of the subsequent posts focused on LHG so I moved them to the LHG thread. Please read the posting guidelines (link at top of each forum) asap, thanks.

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