Hard to digestThe last little period has not really computed. Literally a perfect storm for AU stocks and yet they are not exactly getting the memo.
Personally I feel like I have played and predicted the nonsense we now see on the markets, almost to perfection (except for the margin BS). So I was kinda expecting blast off and well you all know what has transpired. TGZ has dramatically improved it's value even without adding AU price rise. Surely this stock moves up fast and soon.
And today oil added more fuel, with permission from MatthewZ, I am posting his researched thoughts on the value the oil price plummet and new AU price adds.
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"the oil drop should be a huge boost to profit margins of miners. Also, gold has held up amazingly.
Currently, Goldmoney (chart below) has energy pegged at 50% of costs.
So the very recent ~30% drop would in oil could mean a 15% reduction in total costs.
Assuming the average gold producer is at 600-700$ per ounce (direct costs), that’s ~100$ per ounce reduction in cost. (using direct costs here – not AISC)
For a producer like TGZ – that’s 300,000-400,000 ounces x $100 or $30-$40M additional profit...
On top of that we have gold up around $140/oz recently (from last quarter), so another $42-56M additional profit
(note spot was $1515 in TGZ’s last Q – now it’s $1655)
OR a total of $72-96M of additional profit on 167.5M shares o/s or additional $0.43-$0.57/share! (over 1 year)"