GREY:VITFF - Post by User
Comment by
givemeabreak1on Oct 19, 2022 12:56pm
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Post# 35034011
RE:SP Drop
RE:SP DropBarrington a couple of reasons
1.Large Low grad deposits are more leveredged to the POG. Think about it this way! Assume a low gold company has an all in cost of $1500 and ounce and the selling POG is $1650. So the profit margin is $150. A $50 drop in the POG makes their new profit margin $100. So they essential had a 33% decrease in profit. A large high grade deposit might have a total all in Cost of $1100 so they have a $550 profit margin. A $50 drop is less than 10% drop in margin.
Similarly take the low grade deposit now lets assume the price of gold rose $150 over the month. The low grade deposit would have doubled their profit margin while the high grade deposit would only have a 27% increase in margin so the rise in the stock price would be greater on a percetage basis to the low grade producer.
2. Fortelling a real ugly 3rd quarter financial report!