WMC (ASX) Oversold

Originally posted by happy Hippy ↑

I had a quick look at a couple of peers.
MOY 86,000 oz pa at AISC around $1200 with 781,000 SOI and a SP of 26 cents
RMS 130000 AISC $1130 SOI 525,000 SP 56 cents
DRM 120,000 AISC $1509 !!!! SOI 357000 SP 35 cents
Lets make a few assumptions for BLK's next 4 quarters 20,000 oz per quarter 80,000 pa AISC say $1200
So I am adopting a production considerably below guidance and a AISC above. SOI of 338,000
Do the math anyway you want and we should be at 55 -60 cents when compared to our peers
If we hit guidance and even if we need to issue say another 60,000 shares to fund us through this fraught ramp up we still should be 50-55.
So that, I believe, is pricing at worse case scenario. We know as others have pointed out if we ignore the 26 days of lost production due to rain that we are achieving guidance.
Gold as I type is $1666 AUD
We have drilling and the expansion ann to come.
IMO at 40 cents with the AUD falling and POG rising this is sensational buying even if we only pump out 80,000pa with a $1200 AISC with another CR factored in.

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Been in and out and back in, but watching closely.

Re oversold...
Tricky with aisc obviously at this stage but ill work on 1200 so $400/t profit once kinks are sorted, give them until eofy.
Then taking into account cash on hand gives current ev of ~100m. In order to justify that, at a PE of say 7 (very modest) we would need to produce ~40k oz pa. So based on simple calcs, yep way over sold. Sp reflects level of market of confidence, or lack of. Markets are unforgiving on guidance. It's been said before, but for the love of money... under promise and over deliver!

Reason I'm a buyer is because we are not talking incompetence as much as unfortunate timing I believe (or perhaps a bit of both). Ramp up is tough enough without significant rain events delaying progress. Yes there were other issues, but they are painful lessons, and hopefully they'll only have to learn them once

So, do we believe blk can produce 40k oz pa @ 1200 aisc to justify current MC? This is a 6 month hold for me and I'm backing them in to better it. Some will doubt they will deliver on aisc, which is fair enough as it's unproven, but I dont think anyone will doubt they can beat 40k oz unless the whole bloody plant burns down.

I might cop a pasting for this but, for all those in the red I for one don't believe it's as bad as it looks.

I doubt management are saints, but they're probably not devils either. Their lives would be a whole lot better if they can get this thing running smoothly. Let's hope they learn fast or bring in talent that know the game inside out. The money is there.

GLTA