RE:RE:RE:Will Mr Sprott please explain this . . .Very well. As a contractor in the mining business, you will know that it is people in your profession, along with corporate executives through huge salaries, bonuses, options, warrants, freebie shares, and all their related party transactions, who strip out most of the value of mines, so you may have a very positive bias as to the economics of the mining industry. Promoters and industry people will always point to the one or two which worked, returning tenfold or more, like Kirkland Lake (70x from Crocodile?) or Arizona (30x) and held their value or were taken over. But there are thouands of these. Most go to zero in a few years. Another large portion go up and down, but mostly down, and a handful drift upwards, while a select few make enormous returns. The winners to not offset the losers. So if you are an outside shareholder, you need to be either extraordinarily judicious, or extraordinarily lucky. I have likely been a little of both, but at the same time realize how difficult this business is, and how ardently the people in this industry work against the shareholder at every turn.
Again, you say these mines just run for ever. But they aren't perennial growers that compound value. These greenstone gold mines have a good few years, then the lose the scent, and slump, then find more ore, and spend the money exploring more. Seldom to they pay out earnings, or really grow. There are exceptions, of say Barrick or Goldcorp in the early days, and now Kirkland Lake. If you can identify these early, you can do well. But how do you know this is the big one, and not a blowout? Geology is difficult, and most accomplished geologists will admit there is a lot of uncertainty, and a lot of luck, and that they never really know.
If there are 3-5 million high-grade ounces here, beyond all reserves and resources, then it is fairly valued. Unless you're betting on a higher gold price - and who can reliably forecast it? - why own it? If there are 10 million more ounces, then it is undervalued. In the balance of probabilities, I would need more than 5moz Au more to think the stock undervalued and find it attractive. Maybe there is, maybe there isn't. Can anyone truly say?
And another thing, if KL wants to keep its mantle as the finest gold mining company, the go-to gold stock, then they should show their shareholders some respect and pay a dividend. Not 4 cents a quarter. How about a quarter? A dollar a year is 200 million, which they can afford. If times get bad, they can cut it. Nothing wrong with that. This is a volatile business, and investors ought to know it's a risky business. But when they hoard cash, or worse, invest in every speculative venture under the sun, they are saying that they are smarter than their shareholders, the height of conceit. The South Africans used to pay bid dividends. Verdien verdienste; dividende betaal.