Sunday, December 6, 2015

Clownish amateurism from Palisade Radio - OMG miners trading at 4% of in situ metal value LOL.

What kind of fucking idiocy is this?:

The reason they trade at a fraction of their "in situ metal value" is because they're only worth the discounted NPV of the profit they can earn on the metal.

So of course they're trading at close to 0% of in situ value. Because gold miners don't make a fucking cent in profit.

Fucking idiot.


  1. Issues with 43-101 aside, there's a pretty good reason you're not allowed to use 'in-situ value' for absolutely anything. Because its goddamn useless.

    "What exactly is gold worth in the ground?"


    1. Zackly. Someone has to blast the rock, send it to a crusher, leach it, pour dore, then send it to a refiner, before it magically turns into money. And most miners can't do that work at a profit anymore.

      What's Anglo American's gold worth in the ground? Well, it just suspended its dividend, and a gold miner's dividend is partial payment of profits. It therefore has no profits, so its gold is worth zero.

      Maybe if they could just sit on their gold and not wreck its value by mining it...?

    2. Alternatively, spend some time down in The Donald's Murica in sketchy pink stocks, and you'll see news releases where there's BILLIONS OF DOLLARS IN GOLD just literally SITTING in the ground.

      Act fast, you don't want to let that ship sail... Opportunity of a lifetime.

      But more seriously, this is why I laugh when people equate NPV to NAV (usually in reference to their terrible market cap). They're not the same thing. What's the value of a mine that only exists in a computer screen? See above.