I think the quartery was expected. Thats why we have been hit quite hard of late but now is the time to buy not sell. They lost a good 10 days worth of production in January. They still managed to reduce cash costs to $398 an ounce even with a low grade of 4.2 GPT with 85% recovery! The AISC costs of course are higher..probably we can double the cash costs but still with gold tracking at 1300 an ounce they look promising. Not to mention they are debt free with 20.35 million in total cash and cash equivelant in gold. So they dropped around 400k in cash on the prior quarter. They are starting to turn things around now and it's not a bad position to be in. Its not bad at all. Will they really continue to have reduced gold output and lower grade? Surely we can string together a couple of really strong quarters now that the new mill is up and running.
The mill was the big question..it has done very well.
"The new SAG Mill operated satisfactorily throughout the quarter achieving its “name plate” throughput of 2,500tpd on a number of occasions. The tonnage throughput is now operating at below 2500tpd to improve grind size and recoveries. Once gold recoveries improve, the tonnage throughput of the SAG mill will be increased accordingly."
So they are working on grind size now and once they get that right they will pump the tonnage back up..nothing wrong with this.
They are really setting up for a good upcoming FY with cost saving measures in place by delisting from the LSE.
I think Medusa will surprise us and I still think she is a longterm hold from here which has been my view since I first entered the stock. Grade and recovery should pick up this quarter. See below.
"Production from stoping is now increasing and a greater percentage of stope ore is expected to be mined and trucked to the mill in the June quarter"
Add to My Watchlist
What is My Watchlist?