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Hi Dumbledore,
Thanks for your question.
The basis for my assesment that BCD will produce 100k ounces of gold over the next 12 months is my link between their past levels of production and the statement in their 18 December 2007 announcement that: “The Beaconsfield mine has now completed the decommissioning of full mining activities”.
Past mine production levels were:
- 2004 147k ounces,
- 2005 126k ounces
- 2006, was producing at an annualised rate of 100k ounces.
I have assumed that “full mining activities” means that production is now at similar levels to what they did in the past. If not then there should be a reason for this. When checking their announcements to compose this reply I noticed that over the years quoted above, production declined approx 20k ounces per annum. Should this decline be happening again then we could be looking at 80k ounces of gold over the next 12 months.
The BCD management has not given a figure for anticipated future production levels. In their position I would not say one word about what they expect to do in the future, I would simply stay focussed on getting the job done.
IMHO it is for punters like us to ‘join the dots’ to form our own conclusions about what their future will hold. My dots say that management will have learnt their lessons, will be afraid of making even the smallest mistake and that they will deliver.
As far as the direct costs of production is concerned – who knows. Perhaps they will be $451 per ounce or even $551. If the POG (currently A$955) stays around current levels, even if they have to absorb higher costs for a while the margin wil lstill be there to justify a much higher SP.
Happy New Year
Kiwoz48