Bill : Not exactly sure if you are referring to the forward sales or the projection of mining costs.
However, if you are suggesting that the three years of Australian production being sold forward is bullish, I agree with you. Also, I consider the large AngloGold forward sales are bullish because, despite such a large amount of gold having hit the market, the price didn't fall. And all this production has already been sold (which means it can't be sold again, when it's mined).
That's why I'm surprised that GATA is getting so "hot under the collar" about the forward sales because they are, in fact, bullish. All forward sales do, in fact, is displace the time of the sale forward. If the sale is absorbed by the market, particularly at higher than prevailing prices, then the outlook for a price rise must be good.
The cost projection is simply an arithmetical extrapolation. It may, or may not, be met. However, I have heard many mining companies, over the past few years, projecting lower costs over the next few years and, so far, I haven't seen a bottom --- except my own! |
