I appreciate the work that has gone into this chart ... but it’s v. misleading
# when SRs are below 4-5 it seems that the operation mines more much ore than the processing plant can handle
[from Jan’s announcement “during Feb’18, the operation is expected to mine approximately twice as much high grade ore as it will process, providing strong operational flexibility” ... this distorts the AISC (biased upwards) ... gives payback when opening up new satellite pits in the 3-4 year mine plan]
- we don’t have the full explanation for why March stockpiles didn’t go up but the previous month’s rainfall /
lightning surely had something to do with it
# ASIC is a combination of underground and open pit operations ... the chart above assumes purely O/C ops
# in the December Qtr they were effectively mining waste .. combination of higher SR but heavy rainfall impacts (where overheads and operational equipment remained idled for a good portion of time)
- not forgetting grade control issues which increased processing costs
- essentially everything was xxxx’d up last year that increased AISC
# investment in exploration from free cashflows will surely extend life of pits (even current, imcluding u/g ops) and bring fwd ‘free milling’ options (reduction in power costs, which are significant for any mining op)
in summary, the chart is not good guidance for future performance IMHO (but thanks for the effort)
BLK Price at posting:
7.4¢ Sentiment: Buy Disclosure: Held