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Forum Archive Index - September 2002

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Re: Re: [sharechat] STUDY STOCK - LHG


From: "Harold J Skinner" <Petzl@spamcop.net>
Date: Sun, 22 Sep 2002 21:28:08 +1000


}Thanks for the links and the advice. I have ordered a book "Technical
Analysis
}Explained" which was recommended by Phaedrus, hopefully this will arrive
}soon. As for the fundamentals, well I know what fundamental analysis is,
but
}I think I am still unsure how to progress. Basically I can look at all the
}company information I want, look over the financial statements which I
barely
}understand, and scan through the news but I still have a hard time grasping
}how to do this properly. Especially when trying to identify value stocks
}because by definition a value stock is one that is performing badly or is
out
}of favour with the market. I find it pretty impossible to see why it would
be
}a good value investment when the data I am looking at all looks grim.

There is never 100% certainty with shares you just do your homework as best
you can. Rivkin does not decide or nut out the pluses and minuses of
companies he often relies on others for specialty fields such as Oil Gold

 PSA while no one knows what there newly commissioned gas fields will
officially produce any one looking at size of pipe lines to refinery can
accurately say what it is. Gas in the USa is US$3.80 a unit. Most productive
oil/gas finds have shares jump considerably those that do not find gas are
always putting new shares on market VPE for instance is trying to raise AU$2
million as the chances of striking oil even with the latest methods is only
around 20 to 30%. If VPE do or have struck productive oil/gas fields their
shares can easily in most cases go from 2 cents to over a dollar!
PSA has not officially announced what the two gas fields they have
discovered will rake in but should be recieving royalties next month

The T/A is a lot more cautious in this case than Rivkens thoughts, with the
next Upside being 0.55cents then following in the stages below
Resistance:- 0.19-0.20; 0.31; 0.55; 0.72; 1.82; 2.89
Support:- 0.125; 0.081

}What is a hedge all about? Is this some sort of debt? Does the fact that it
is
}an open pit mine score a "+" for the fundamentals of this stock?

Basically the LHG open pit is running out of gold and they are now going
through the tailings. But are still OK, but not great. Profits will be
geared to increases in gold price (if any). Gold is also in US dollars so
your own exchange rate is part of this factor to be considered

When gold prices were low and looked like getting worse many/most goldmines
forward sold their gold at prearranged prices! LHG have forward sold
(Hedged) 70% of their production

LHG negative bit is here
"However, Lihir has both operational and PNG sovereign risk, which gives the
company a higher risk profile. Leverage to gold prices in FY03 is limited
with some 448,000 ounces or 70% of anticipated production forward sold. In
the short term, capacity will be lifted to offset lower grades, prior to the
shift to the Lenitz orebody in 2005."

> (The power was cut by some tribe there a short while ago so the politics
in
> this area are not stable)

}Is this not true for the rest of New Guinea? Since it is such a small place
I
}would imagine any political unrest to be distributed across the entire
area.
}Do these sorts of things really influence the companies share price?

New Guinea is a basket case that should not be considered politically
stable! Riots, corruption, etc, rampant

HIG are just in  the beginnings of mining with no hedging (yet) and present
gold prices look like breaking (according to T/A) US$330- Then should go to
US$380 (again according to T/A). This is also good news for LHG





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