Hi Guys,
Just dropped in after reading the announcement.
RR, no - sorry I am not privy to information about the CR as I am no longer a shareholder. Whilst I still have material gold exposure I decided not to continue my BDR investment in the 2H last year.
Whilst I truly hope that this CR is for growth opportunities as some are suggesting here, I think that the last QR paints a very different picture:
- Poor head grade fed into the mill relative to expectations (anecdotally 2.2g/t targeted from conversations at last AGM)
- Issues with mining fleet efficiency and amount of material being moved. Regardless of the reasons (constrained pit) this has been ongoing both pre and post MACA
- Mill issues during the Quarter that reduced throughput
- Reconciliation issues between stated AISC and cash balance at Quarter end
- Upcoming capex required including Mill alterations to deal with transitional/ fresh ore and power infrastructure
- Wet season is now in full swing which has historically been a large cash drain on BDR. IMO the 2H 2016 was very disappointing in terms of cash build on the balance sheet (or lack thereof).
- Longer term the transition from oxide to transitional/ fresh ore presents recovery and throughput risks at this stage until proven otherwise
- The BRL is no longer providing a tailwind for BDR's in country costs and, if other commodities continue to recover could become a serious headwind.
- FY17 guidance provided no company specific growth opportunities - treading water. Only growth will come from generic gold price increases and if this is why you're invested, you may as well invest in a miner with a much greater production profile.
My speculation is that SJ is shoring up the balance sheet whilst sentiment is good and before Q1 2017 results are released to the market.
I would anticipate a further drain in cash from this Quarter (excluding CR) and whilst the exploration results are very encouraging I have discounted BDR from my shopping list - single mine in the jungle with ongoing operational issues and currently bleeding cash from the balance sheet.
Good luck and I hope that things are not as I have speculated.
Cheers
John
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