Some good news, and bad news.
First, the bad:
FY24 & FY25 production guidance
Whilst FY24 is not too bad - circa 3k below analyst forecasts assuming top end guidance - will see a slight miss. However, that could be made up by a number of factors including improved recovery rates, higher prices etc.
FY25 is where the valuation problem is. This new guidance is a 50% miss on analyst expectations. See below extract of Macquarie Equities valuation assumptions showing 181kt production estimate. This will hurt the share price with the DCF model to take a sizeable hit.
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But, there is good news.
Unit Cost Guidance
C1 costs are guided at A$1,165 - $1,250 per t versus an AISC forecast shown above at US$1,356 per t and reducing year by year.
Add in all other costs, and unit cost guidance is still pretty good and should give DCF models a valuation lift.
All-in-all, it's not too bad a report and it reminds me of the early days at GXY when they restarted the Mt Cattlin mine. The pain will be short-lived as there is a more significant prize that awaits investors beyond the initial operations.
Just cast your mind forward to when BP33 is in operation and we are churning out 200k+ per annum production.
We need to be patient, that's all.
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