Ann: 2015 Annual Financial Statements, page-81

First 81 Last

Share
Profile

Follow
plough

34,354 Posts.

1934

13/03/16

08:29

Post #: 17261292
Share

Originally posted by Galena72 ↑

Plough - you are reading the wrong page, that definition is a 'Total Production Cost'

Page 13 has Agnico's definition of AISC: Total costs + sustaining capital + corporate expenses + exploration expense.

If you read my note, I used 'site based' AISC (not including corporate admin and exploration) and noted that it was site based only. This gives you an indication of the free cash flow (FCF) potential of the Kipoi operation, but not the company level FCF. My own view is that the quoted AISC should really be 'all-in' and include all items - but I only used site based AISC because that is what TGS applies (as many investors have probably now worked out).

I did the company level FCF calculation further down, where I included the corporate admin, interest expense and exploration expenses. This is the important cash flow number that investors should focus on - as it is the cash that can be used to firstly reduce the debt principal, then for growth capex and for shareholder returns (dividends and buybacks).

I wouldn't hedge at current copper prices. Last year would have been helpful, but the debt structure is now solid and I want full exposure to the potential upside in the copper price. At a share price of 5.8c - my guess is that the market is pricing in a scenario where copper never recovers. If you think it does in the next 1-3 years then TGS offers maximum exposure.

Expand

I was reading of a different page doubt if it was a wrong page , as based on the summation on the "last page" of that report there are so many ambiguities for AISC still

"Key issues to address: - Gold equivalent production - Definition of by-product credits - Definition of sustaining capital - Interest expense treatment - Handling corporate taxes - Is depreciation a better proxy for capital and acquisition costs? - Impact from IFRS accounting policies"

There still seems no defined definition for AISC , no wonder the raucous noise when we are not singing from the same hymn book.
Agreed TGS seems to use just a site based AISC which seems disingenuous.

TGS Price at posting: 5.8¢ Sentiment: Sell Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

Bitcoin hits fresh record as instos pile into BTC ETFs – and Trump helps, too

Week 44 Wrap: Relatively boring week ahead of US election; HotCopper's most watched; Oz inflation at 3.5%

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

MIN

Ellison slapped with $20M sanction from MinRes but will stay on as leader – for now

MIN

Movers and Shakers: Zip Co, MinRes, Kuniko, more – The week's top ASX gainers