Ann: Quarterly Activities and Cashflow Report, page-73

I acknowledge from the outset that I am not an accountant and have little understanding of accounting procedures. Constructive criticism of what I say is most welcome.
While trying to work out and understand the stated production cost per oz for the quarter I have looked in more detail at the financial account summary in the quarterly report. Gold production of 4,594 oz for the quarter at a cost of $1270/oz equates to $5.83million. Production costs alone for the quarter are recorded as $7.542m and with exploration, staff, corporate and administration costs together with interest and other costs, resulted in quarterly expenditure of over $11m. I realise that some of this cost was associated with increasing the ore stock pile. I am also not sure whether the $80/oz payment to the previous lease owners was included in the $cost/oz under royalties ($131).
Expenditure for next quarter is estimated at $6.880m which appears not to include any interest payments or 'other payments' nor the earlier indicated expenditure of $0.5m on necessary replacement machinery parts. Consequently, I cannot see production costs coming back greatly even given that gold production for the quarter should exceed the past quarter.
The purchase of extra plant and equipment last quarter, 'to save on machinery hire costs' seems at odds with the stated hire costs attributable to the directors, being only $8k. My understanding was that much of the earth moving equipment was hired out to BCN by one of their companies, as was the case at the Halley's East mine.
From my reading of the accounts, if the proceeds from the recent share issue (which most of us were not thrilled about) and exercise of options, which raised over $11m, had not gone ahead, the current cash balance would be looking pretty sad and perhaps even gold production could have been in danger. The money certainly hasn't been used on extensive and expensive drilling programs or acquisitions, apart from Panther, which was a minor cost.
I think the fundamentals of BCN are sound and its future is bright but largely hinges on finding more gold to extend the mine life.
However my reading of the report leads me to believe that the company has been sailing closer to the wind than most us believed and may be the reason for the current lack of buyers and the stagnant and falling share price.