We need somebody with geological skillset to interpret this report.
The comments at the front of the report are rather skimpy compared to past reports by BDR and other companies. It does not mention the strip ratio for the ore reserves or the assumed gold price. It seems the ore reserves in pit Tap AB has fallen compared to the previous report but the grade has risen to just under 2 grams/tonne. The higher grade is good but the last report indicated that the strip ratio for Tap AB was around 9.3:1, ie over 9 tonnes of waste to 1 tonne of ore.
I tried to find the details in the more detailed section of the report. I am not good at reading the this section . I did find that they used $USD1200 as the gold price for the reserve and USD1500 for the resource, and that they assumed the plant was achieving 93% gold recovery rate which is expected from the completion of the plant upgrade in mid 2018 (current recovery rate is 88%), so a bit of fiddling there as the report purports to relate to the status as at mid 2017.
There could be a bit of window dressing in this report.
My concern is in regard to their ability to produce the gold required over the next 6 months in the wet season given the high stripping ratio at tap AB and the extent of their high grade ore mined this quarter. Unless they can deliver on production there is a very strong chance of a capital raising early next year. There is a reason why this baby is being shorted with confidence.
The improvement in dirt movement in the last quarter is not near enough to meet the requirements of a 9.3:1 strip ratio deposit, so my confidence in BDR coming near their production targets has declined. Given their plant size and assuming they wanted to source all ore from the pit they would need to move 10 million tonnes this quarter given the 1mt ore I expect the plant to process. If they use the stockpiles the grade milled would fall a lot and hence production would be a lot lower than the 60k ounces forecast this quarter.
I would really appreciate someone with geo skills providing comments on the report -
@worzel1 - do you have any views on this report?
loki
