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Gold/Mining/Energy : Precious and Base Metal Investing
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To: gold$10k who wrote (28345)3/3/2004 4:18:14 AM
From: rubed  Read Replies (2) of 39344
 
I too am overweighted with SUF because of its potential but there are a number of reasons it is so low.
1. SA royalty bill
2. Rand exchange rate - every 1 rand per dollar increase takes 25 dollars of the margin. Rand up from 15 to 7 in the past two years.
3. Repeated missed production targets - they are not on track as they promised 80000 tpm for September 2003 and have not met it yet.
4. Cap on pt price for Messina through buying agreements.
5. Repeated dilution - along with missed production targets this has greatly decreased investor confidence in management.
6. Waste of money with US 7 million diamond exploration program.

What are they missing?
1. Increase in prices of other commodities beside pt that are coming out of Messina.
2. Pricing based solely on Messina Phase 1 while Messina Phase 2/3/4 plus Millenium which are unrestricted by pt or pd caps are ignored.
3. Use of money to pay down debt or advance smelter project.
4. Gabon gold???

They need to break this company up and have separate diamond exploration company plus a south african pgm miner. It still has great potential but is dragged down by a number of factors and under the current set up it is impossible to realize any value for the diamond assets.

rube
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