LHG unknown

do your sums on lihir

  1. 1,544 Posts.
    I bought LHG about 15mths ago on the hype of the POG going ballistic. When I got the annual report I though it was a shocker, like this year's. I wasn't in a hurry to dump them because they acted as a proxy for POG. But sell them I did.
    Consider this;
    There are 1,142mil shares according to Comsec.
    To be worth $1.30 today it must be able to pay more than that as dividends out of the only mine it has, lets say 40c per for five yrs starting 2005.
    That means they need $500mil after tax for divs.
    Div that by the no of oz's per year [I can't remember but will pencil in 1mil oz's] and you get the margin needed.
    Current price is approx break-even.
    ERGO POG must rise A$500/oz before LHG is worth it's present price.
    By then the US$ will have bombed so in ball park figures LHG is priced for US$1,000.
    You're safer with physical.

    These figures are rough guesses, but you should get my drift.
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