A Great Turnaround Story I just think that this respectable gold stock has been way oversold and is now ready to deliver some very good quarters, perhaps the best in its history.
It will soon complete a PP at 57 cents which shows that it has nowhere to go but upwards.
The evidence shows that it will be a much better performer for the rest of 2013.
First, the POG should be now near or just at its normal seasonal low period.
It should soon begin its normal seasonal rise, as fabrication buying picks up.
Also, production is rapidly increasing and is now close to the 75,000 oz per year rate.
Higher production will drive cash costs downward.
The conversion to in-house mining will also begin to show up in decreased cash costs.
This is expected to lop off $150/0z in cash costs.
The Aussie dollar is also declining, which will also benefit production economics
Finally, much higher grades ( about 40 % higher ) than the low grade material recently mined is now beginning to enter the production economics and will also decrease cash costs.
Most recent total cash costs were about $1250 per oz.
I see these coming down to about $900 per oz.
If POG averages $1500 this year, the free cash margins will be about $500- $600 per oz which will produce cash flows well above $30 million per year.
The current market cap is less than that, which shows just how oversold this small producer really is.
At just 4 times free cash flows, the upside is about $1.
Thats why they can raise money at 57 cents per share.