the people at Investec are out. They knew that Drooy's earnings would sink even further after a quarter or two -and that would have nothing to do with the Rand! Drooy is having work played out workings and having to dig even deeper for gold that is more uneconomic to mine. Now some like that pest Lester and fool Sulith may think that I am a moron. I have only one thing to say:
Do your own research and find out if I am telling you lies!
You are one dumb SOB. I suppose that Investec loves throwing their money away on losing investments. Get a clue, will you? One would think you just fell off the turnip truck. Not one friggin link to support your stance. Why? Because it is not supportable. I hope you are not teaching my kids.
Yes, I did my own research and you ARE telling us lies. Stop trying to damage people's investments in this fine company which is growing revenues and diversifying its asset base. Now, get lost, scumbag.
The theory is that a mine that is only marginally profitable at present levels is hugely leveraged. Example; You are mining and processing 1 ton of ore to get 1 oz of gold and it costs you $390 to do that. Suppose that gold is $400/oz so you manage to eke out a $10/ton profit. Your stock is presently trading at $4.00/share.
Now suppose that gold goes to $410/oz., a mere 2 1/2% move in the price of gold. Assuming that your mining costs are roughly the same from one day to the next, you are now making $20/ton or double. Since share prices tend to maintain a price to earnings ratio, if your profits double, your share price doubles.
Further, as the price of gold goes up, it makes previously uneconomic ore bodies profitable, adding further value to the share price.
If you have never seen the exponential explosion of a gold share price, stand by, you soon will!