Most under-valued Australian gold producer

[StumpyPhantom]

I asked this question of a broker because of some views that the gold price was bottoming out. With the Euro crisis rolling on, and the Aussie dollar generally staying low during that time, I wanted to know if there were any Australian producers on the ASX who were considered a bargain.

I was told NCM at about the current $24 price. I just wonder whether anybody disagrees with that and/or thinks any other Australian producer might represent better value.

 

[explod]

I asked this question of a broker because of some views that the gold price was bottoming out. With the Euro crisis rolling on, and the Aussie dollar generally staying low during that time, I wanted to know if there were any Australian producers on the ASX who were considered a bargain.

I was told NCM at about the current $24 price. I just wonder whether anybody disagrees with that and/or thinks any other Australian producer might represent better value.

Have a study of NST. though it is up a bit the last week or so there is a lot more to come.

No sovereign risk. 60% of shares held by management and the top ten shareholders so probably safe from a takeover.

In the last 12 months they have hit some of the highest gold grades to the tonne ever recorded. Still to be confirmed in size of reefs but looking good. And the surge Friday indicates that something real big is in the wind at the moment.

However this is not a recommendation. One should always check back over the last few years announcements and bounce off others that know the gold show before coming to any decision.

I am a holder so may be biased as well.

However NCM is a safe one paying a dividend and I hold this too.

 

[Sean K]

Have a study of NST. though it is up a bit the last week or so there is a lot more to come.

No sovereign risk. 60% of shares held by management and the top ten shareholders so probably safe from a takeover.

In the last 12 months they have hit some of the highest gold grades to the tonne ever recorded. Still to be confirmed in size of reefs but looking good. And the surge Friday indicates that something real big is in the wind at the moment.

However this is not a recommendation. One should always check back over the last few years announcements and bounce off others that know the gold show before coming to any decision.

I am a holder so may be biased as well.

However NCM is a safe one paying a dividend and I hold this too.

It seems to have a pretty high MC ($250m ish) for just 1.3m oz au explod. They do look like they're going to improve the resource down hole at Paulson's but by how much is a question. The monster grades of 65g/t was only over .43m.... That's not great at massive depth is it? Having said that, they are producing, at good cash costs, unhedged, and no debt....

 

[So_Cynical]

It seems to have a pretty high MC ($250m ish) for just 1.3m oz au explod. They do look like they're going to improve the resource down hole at Paulson's but by how much is a question. The monster grades of 65g/t was only over .43m.... That's not great at massive depth is it? Having said that, they are producing, at good cash costs, unhedged, and no debt....

From memory (IAU) Paulson's is a very vein-y deposit.

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PanTerra Gold Limited - PGI has just started producing and at a very low cost, lots of upside with low risk production and geopolitical.

 

[StumpyPhantom]

Maybe an ETF based on Australian gold producers would do the trick of catching this cyclical low. Is anyone using one at the moment?

 

[Sean K]

From memory (IAU) Paulson's is a very vein-y deposit.

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PanTerra Gold Limited - PGI has just started producing and at a very low cost, lots of upside with low risk production and geopolitical.

ooo, I didn't see those other results either with truly monster grades.

Looks very vein-y.

 

[blue0810]

Maybe an ETF based on Australian gold producers would do the trick of catching this cyclical low. Is anyone using one at the moment?

I don’t think that we have on ASX ETFs that track the XGD.
There are Gold Bullion ETFs: GOLD, QAU.
LIC that have some producer : GMI
ETF that include 11% Gold Stocks : OZR

 

[tinhat]

SLR are on my watch list but I haven't looked into them for a while and can't remember much about them. My only pure gold mining investment is in MML and I'm quite long in them so I'm happy to have that as my only gold play in the SMSF portfolio. They are a Philippines miner though, been punished by the market for production disruptions this year due to weather problems, but very low cost, with a great resource and prospects over the medium term including potential for regular dividends.

 

[mr. jeff]

SLR are on my watch list but I haven't looked into them for a while and can't remember much about them. My only pure gold mining investment is in MML and I'm quite long in them so I'm happy to have that as my only gold play in the SMSF portfolio. They are a Philippines miner though, been punished by the market for production disruptions this year due to weather problems, but very low cost, with a great resource and prospects over the medium term including potential for regular dividends.

The problem with SLR at the moment is that they are chasing copper and the pricing behind that can be at opposites to gold which may be a comfort for the company, but takes the shine away at times of fright when copper drops and gold moves up.

ABU has a JORC now and they have not really budged after that recent announcement ("3.3 Million Ounces Gold in Resources Across Three 100% owned Northern Territory Gold Projects" 14th April) so may be worth investigating. Why they are not moving I don't know, perhaps as they are only an explorer.

Someone should buy them while they are going cheap. Maybe Ramelius as they have cash and pretty average ground. Who by the way are trading very lightly and lowly at the moment as well. $180M MC with production ongoing at a new mine. Possibly a good time to move on them due to the severe (overly in my mind) hammering they have received recently.

I agree that NST is very attractive.
RED should have a mention as a low cost producer, though yet to prove itself in management and production, and country risk for that matter.

TRY is low cost but has been stronger in recent times and sits at about $370 market cap with decent ongoing production. Similar is SAR, RRL, PRU* and IGR who all have decent MC's still but have been more stable recently.

If you want hammered but not necessarily undervalued, look at AMX they should rename to "Black Plague Exploration".

(*PRU still carries a large premium)