1. Some $52mil in cash, $30mil in investments
2. A resource of 4mil oz
3. A mine construction plan expected to deliver a capital cost payback of 2.5 years near current ($1500/oz) gold price, or 1.5 years at $2000/oz gold price
4. The added potential to offer expanded resources
5. The added potential to expand mine plant capacity from 2Mtpa to 4Mtpa
6. A large tract of exploration acreage
7. A mid-tier mining stock which has appeal for a takeover/merger, either of which proposition which result in a re-positioning of the stocks.
The other short term reason favouring gold stocks is the gold price - which is currently sitting at its support level. This stock has just been removed from the ASX-200 Index, so it has been punished for that reason. We are however confident that it will return to the index in due course, and that it will out-perform the broader market.
I will however caution investors that there is no strong chart 'technical support' for this stock, so whilst a consolidation is evident, you might want to use technical indicators to pick an entry. It has not yet become a technical 'buy'. It is however clearly good long term value. One should of course also keep an eye on the gold price to ensure it has support at $1550/oz. The market is currently divided on the outlook for gold. We provide our reasons why we like gold (and Japanese foreclosed & Philippines property) here.
Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
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