RE: RE: 90 M Guy is not Stupid Good comments. In my view, convertibles are last resort financings.
But, there is robust demand for yield instruments these days so the convert has good demand . . . so, likely the 6.25% coupon is reasonable and maybe this impacts the NAV less than an equity raise.
But, if gold price goes lower, LSG will have more liquidity problems. I am thinking their $850 / oz cash costs benefits from the tremendous amount of spending on development which they imply won't be necessary going forward. All underground mines require ongoing development work. $850 seems low compared to other underground mines with similar mining methods and in some cases better headgrades.
The right way to value LSG at this point is enterprise value / EBITDA since this convertible is probably already busted.