Sandfire Resources is already past its prime

John Robertson


Sandfire Resources is already past its prime. The current market value implies a mine life from existing operations twice as long as the current resource would permit. It must work hard past this point simply to validate the value already being attributed to its current business. It has a large holding over the most prospective parts of the Bryah Basin but promises of another big find there have not eventuated. It says it is focused on discovering, developing and operating high-quality resource assets capable of delivering substantial returns for our shareholders. The 7 April investment in WCB Resources is a lurch in a fresh direction for a company finding it hard to live up to its reputation and now in search of a strategy. This is a dangerous time for shareholders at risk of cash flow from DeGrussa leaking into a series of unknown value traps.

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


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