The Sirius Resources feasibility study released on Monday failed to live up to the company's one billion dollar market value

John Robertson

PortfolioDirect

The Sirius Resources feasibility study released on Monday failed to live up to the company's one billion dollar market value. Of all the stocks in the sector, Sirius might be the one to most deserve being priced for perfection. Investors would have a dramatically different view of the whole sector if Sirius was typical. In speeding to production, however, Sirius is going to market with a modest 10 year mine life. The feasibility study foreshadows pre-tax project cash flows of $2.7 billion. Kasbah Resources is in a similar development position. Its March feasibility study foreshadowed a $260 million pre-tax cash flow. The size is different by a factor of ten but the market values are different by a factor of 30. Kasbah has not created the same excitement in a depressed market but is more typical of the risk/return balance on offer.


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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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