Here is my understanding of the Double Jay mine. There are three pits:
DBJ15: currently being mined (also Heffernans). Low grade as per Sept qtrly report. (Dec qtr prod is likely to be sourced from these pits, plus some U/G ores and therefore production remains low i.e. 20Koz). DBJ07: stripping now. Extraction of higher grade ores from this pit in June qtr 2022. Coupled with U/G ores, expect milling of better quality ores and therefore the production guidance of 40Koz for the June 2022 qtr. DBJ14: stripping now. Small quantity of ore will be mined but production is ramping up in FY2023-2024
Development capital allocated for FY2022 is $66.5m and this cover the cost in the stripping of the DBJ pits and U/G development Development capital allocated for FY2023 is $40m.
ASIC does not cover the above development cost. Development cost is covered under AIC and my estimate (no guaranteed to be correct) is ~A$2,450/oz. This is the figure for DCN to break even for FY2022. Hence POG is going to drive profitability of DCN for FY2022 and therefore its share price.
A point to note is that there is hedging and therefore Dec 2022 qtr is not going to be greatly dependent on POG changes.
Obviously FY2023 will be different since less development cost and higher production output and hopefully higher POG.
