To me the kiss of death is the combo punch of South Africa and high cost production, i.e: most of the gold miners there. In SUF's case though you have South Africa, and a low cost structure ($150/oz on PGMs). That's OK, plus right now it's out of favor with the big decline in PGM prices. I mean ultimately if one is to be a PM investor, one has to wander into SA ,and of all my holdings, less than 5% is there (ARQ). SUF also has the takeover angle (I think, except that the govt seems anti-foreigner and anti-capital, if that's a fair characterization?), it's fundamentally very cheap, and it's a growth story, and I think most serious PM investors might use a little diamond exposure. And can I really stomach another junior (Saskw.)? SUF a nice portfolio fit for me, and I'm looking for another dip to enter.
The ideal would be to hedge the SA political risk with something in a safe setting. Obviously if SA ever blew up, you would have interruptions to what, about two thirds of the world's PGM supply and a monster home run elsewhere. There's SWC, but it's a dog. Leaves all the beat up neglected Canadian junior explorers, but does one really want to go that route? I already own SLR, and GEO (if you could even call Marathon viable at all now) and a tiny PFN position. Is PDL cheap enough to fit the bill? |
