Forum Archive Index - March 2001

[Derek <dkw@paradise.net.nz>]

The NBR artical was informative, but I don't agree that GPG
could pick up OTR for 31 cps. In the last while, OTR has
reached up to 40 cps without much selling pressure
coming into play. IMHO the drift down in share price
is coming from a lack of buying interest rather
than people queueing up to sell.

OTRs share price is obviously strongly related to the gold 
price. They have about 83 m shares and produce about 110 000
ounces of gold in a year.

If the price of gold goes up 42c US per ounce then
that would add $11 m (NZ) to their bottom line (13 cps).
If it goes up further than that then the upside could
be huge. If gold goes down or stays the same then
OTR appears to be in trouble. 

My conclusion is that there is good gearing to be had
in OTR at the moment with respect to the price of gold, 
however this should be balanced by the downside risk of 
gold staying static.

According to some commentators (www.privateer.com) the
gold price has bottomed, so here's hoping.

I've found that http://www.kitco.com/ is good for 
keeping an eye on gold. One approach would be to look
for a sustained upward movement in gold and buy into Otter
at that stage (assumming the market here has not already reacted).

In the meantime, I'm waiting for a bottoming out of OTR
in order to do a little averaging down.

Derek


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