Southern Gold Sets Growth Platform
Southern Gold, developing gold assets in Western Australia, is another in a new breed of gold producers committed to starting small and, by establishing an early production platform, creating a basis for future growth. The strategy, a consequence of investors being reluctant to commit development capital, usually results in lower near-term valuations but greater development certainty and improved prospects of positive future value momentum. The strategy which implies a more lengthy duration for share price appreciation as volumes build by enough to underpin value increments ultimately favours investors by giving them an incentive to stay with the company rather than trade out after a short term holding.. The PortfolioDirect GLOSS quality rating and risk analysis has characterised Southern Gold as having an unusually low risk profile which compensates for an asset base in the lower half of the quality scale because of its currently anticipated short life. Southern Gold has been classified as a Phase II company and rated ‘3’ on the five point PortfolioDirect rating scale where a ‘5’ is the highest rating on the risk adjusted quality scale.
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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