Cashflow, page-6

Hey Icey.

Firstly, if you missed it, here is my post from yesterday (Thoughts?) Happy to have you tear it apart.

Secondly, whilst I freely admit that some posters who have been negative about the company have proven correct, although, a couple of posters have proven to be downright pathetic in their repeated posting with such extreme views like... BLK should simply halt all operations... and.... build a new plant!???? Seriously. While I try to be open to others views, well done on testing my patience. Anyway....

Icey - regarding some of your numbers, I am not surprised that the costs of production are much higher than in the March quarter, largely because they were unable to mine some of the pits for extended periods of time (plus mined less or U/G), but did use some of the stockpiles to keep the plant fed (how much... who knows, my guess is about 6k worth of the 15k stockpiled at the end of Dec 31st). They spent a lot of money stripping the M4 pit (huge pit) along with Galaxy, which they would have entered if not for the wet weather (I think some are perhaps thinking that the wet weather only affected them in March, it also affected them in Feb, but to a lesser extent, going from the rainfall data I have seen, plus the quarterly). So, mining costs are going to be higher, development, much reduced as they have done the heavy lifting for the stripping, so... should be all mill feed now. The quarterly mentions that on a ton basis, they were able to operate at below the forecast costs, by approx 10%, this will hopefully assist in offsetting some of the issues that they still faced early in April (yes the quarterly does not do a great job of exactly spelling out just how they are going), except that M3 & M10 pits were accessible by the 28th of March, but still likely wet, so... lower grade, M4 and Galaxy not accessed until a little later, 2nd week of April.

Regarding their production guidance, without doubt that was a terrible overestimation, albeit, the rain events surely knocked everything out of whack. Perhaps B.D now needs to live on site for a couple of months, to really understand what he has been talking up for the last 2 years. I do think they planned to hit at least 25k in the March quarter with a similar number in June, with both Golden Age underground and Galaxy being mined but alas, that is only now occurring *my guess is they had planned to produce perhaps 8k from Golden age, but... due to the issues, held off mining until they got confirmation about the the grades etc. Again, have a look at my numbers in my earlier post, they attempt to whittle down just what we might see this quarter.

Regarding cash burn, I do think it will be lower than what you forecast, largely because they have to date, produced 2100 ounces above what they have sold, plus they def receive a higher gold price than the one they did this quarter (i.e if they produce 18k ounces, 11k of that will be at $1644, with the rest around $1690 to date, giving an average of approx $1661). meaning they should clear $30m in revenue, with the potential to beat that if... if the have been conservative for the first time with their most recent (and terrible) guidance. I think it likely they will burn perhaps $5m. Meaning they will still have close to $30m in liquidity at June 30. I am hopeful they will give an update at the end of April, whether it be good or not, time will tell, but.... it won't be amazing as they have already stated clearly, the start of April has seen a slow ramp up of open pits, plus the issue with the underground. BLK has two reputable operators running the open pits and Underground.

Very much agree about the FY18 outlook, it will be a real test of BLKs board to see if they can steady the ship, or.. lose it someone else, and yes, I still think that BLK is now priced for almost total failure. There are quite a few small caps worth $40m+ that have no viable resource, or even much cash, yet for just $60m more you can have BLK. If BLK management are not upto scratch, someone else will take over BLK, perhaps for not much of a premium, but considering that not long ago, MetalX was buying what most viewed as higher risky, unprofitable gold projects or mines (and have spent huge capex to get them into production), yet... today, is aiming to produce 300k p.a.

It was a hard decision to hold my BLK shares but for now, I will give them a chance to right the ship.

E/V now a measly $109m. Sigh.

@Bortgm - good post.