Well that did save me some time and proves exactly what I have been saying except the chart doesn't show the reserve depletion through mining from year to year which would need to be added to the reserve numbers shown on the chart each year to get a true picture of the how many ozs of reserves the company has been able to add each year.
As I said to sustain 850koz -900kozs of production per annum the company will need to replace JORC2012 compliant reserves (after mining depletion) year on year or risk their reserves shrinking and therefore putting them in a position where the in ground value of such reserves skyrockets further (as the reserves shrink) past the already absurd number they now sit at of about A$1,800/oz. If the market is acting rationally (which I don't give it much credit for as the market for NST is driven by US banksters who somehow via less than a handful of banks control 60% of the company's share register through nontransparent nominee accounts) it will discount NST's share price as its reserves shrink in response to them being depleted through the higher production rate (should they achieve it). I fully understand that underground mines replace reserves bit by bit as I have been invested in Kundana for about 20 years but there is no doubt in my mind that NST's assets are not capable of sustaining such high levels of reserve replacement. Let's look at the reserve chart you have posted in more detail remembering that if we want to do a proper job we need to add annual production to these numbers (which I won't do for now) to see how many ozs of reserves NST has been able to add through drilling and acquisitions.
According to the chart the company started with 0.257Mozs of reserves in 2013. Below are the year on year increases in reserves (not including production)
From 2013 to 2014 reserves increased by 0.943Moz (due to the acquisitions of Kundana, KB and Jundee if my memory serves me correctly or was it Plutonic as well and Jundee was in 2015.......doesn't really matter the point is they didn't drill most of the reserves they bought them)
From 2014 to 2015 reserves increased by 0.3Moz
From 2015 to 2016 reserves increased by 0.5Moz
From 2016 to 2017 reserves increased by 1.5Moz (this was the big push in drilling if my memory serves me correctly that won't be replicated on their existing Australian assets because they just can't give reserves at this rate year on year)
From 2017 to 2018 reserves increased by 0.5Moz
From 2018 to 2019 reserves increased by zero. Of course there are the Pogo reserves which were acquired and are not yet JORC complaint but as you can see historically NST has only built (acquired !!!) reserves at a rate of over 900koz/annum in one year out of 6 of it operating history as a miner. The Australian assets are on a peaked reserve curve unless the price of gold takes off wildly and they can expand their existing reserves without drilling. It will be interesting to see what the next reserve statement for these assets has to say.
And there are some people here calling RND/TBR dud companies. If it wasn't for the EKJV acquisition NST wouldn't be the company it is today as that joint venture (pre-pogo) has historically contributed a bit less than a third of the company's lowest cost ounces and BB in a public announcement said not long ago that $150 million was a fair and sensible value for that asset. Makes you think about NST's value today if Bill thought that $150 million was a fair value for an asset which in the 2018FY contributed to 28% of NST's lowest cost production.
NST has a bankster bubble valuation IMO and we all know what happens to bubbles after they they float gracefully through the air giving the children all that joy. Esh
NST Price at posting:
$11.69 Sentiment: None Disclosure: Not Held
(20min delay)