Crikey mike give me a chance I didnt even know I'd been ASKED a question when I made that post! I have endeavoured to give my case to Tyrell in my reply. SHG are one of the cheaper producers and are aiming to bring their cash costs down further re previous RNS issued this year, op update April I think.
Look mike if Gold actually dropped to $800 (which it won't btw) numerous mines would close as you say and supply would be switched off. Hmmmm now what do you think that might do to the gold price when demand drastically exceeds supply. I believe Gold is nearing the bottom of what is already a very large correction and we may reach a final climax of selling yet but it is massively overdone. Markets have a habit of overshooting. Anyone who thinks that gold will remain suppressed for long in such an uncertain global outlook (sustained low interest rates, huge debt, weak currencies etc etc) is missing a fantastic opportunity.
They've forward sold almost half of this years expected production:
"over 30,000 ounces through to March 2014 at an average price of $1,398 per oz."
Whether that is enough remains to be seen of course. It depends almost entirely on your view of the gold price going forward. It must be clear to you that I am bullish about the gold price. Why? I am bullish because we are simply in a bull market correction period. I think Bernanke is NOT going to be able to turn QE3 off. Indeed if you actually read what he has said he has NOT said that he will taper or switch it off UNLESS unemployment, growth, inflation etc fall within certain parameters. The truth is that central banks are in a hole, they cannot stop the bond buying or markets will crash. So, if they keep buying that will bring net interest rates back to negative which is bullish for gold. They need to make inflation. If they stop the QE markets will crash and in that situation which asset class will investors turn to? Gold. Either way, Gold will be where the money will flow to. Its not a question of IF its a question of WHEN.
Dibs didn't really answer your question. he says the sp is cheap, and it probably is, but what if the gold price continues to drop, where does that leave shanta. a few months ago when gold started dropping, the so called analysts/proffessionals predicted it could go as low as $ 1200, now they are saying as low as $ 800. if this happens then we can only assume that most gold mining companies would be making gold at a loss, therefore gold would then ceased to be mined, thus creating a massive shortfall of gold. shanta seem to have taken a bigger hit on their sp than most other gold companies, even though they are selling more than half of this years gold at around $1400, they should be still producing a decent profit for this year and will know that they will need to find a way of reducing costs longer term, as to how long they or any other company survive, who knows, if gold can stay around $1300/1400 then shanta should still be able to produce good profits longer term. if it continues to drop then where is the future gold going to come from when most of the mines are closed.
Dibs do you think that Shanta have done enough with forward sale contracts to enable them to ride the storm out. There's talk of gold price being hammered for another year. Will we survive? As you can probably tell I'm new to this so interested to hear your views. GLA.
No way am I capitulating into this savage gold price correction. Because that is all it is. A correction in a very long term BULL market. Anyone who thinks the global economic problems have just upped and floated away along with all that astronomic debt is mistaken. QE3 on the way out? Yeah right......
Tremendous, possibly once in a lifetime, buying opportunities opening up if you have the cash.
Very sad that I've used all my resources up and could not get more of these on the dip. Guaranteed, barring acts of God, to make a maiden profit with 30koz already ordered at just under $1,400/oz. I have NO idea what the price of gold will be next year, but I can't see India or China failing, or their love of gold diminishing, so betting on an upturn. All IMHO.
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