CAI has to deliver 48,500 ozs into the hedge this year. On the low end of forecast production of 65,000 ozs that gives ~15,000 ozs which can be sold at spot. Every AUD$100 increase in the PoG = $1.5M/year extra profit to the bottom line. So far PoG has increased by AUD$200 this month and is showing signs it is going higher.
I did some calcs a few weeks ago based on PoG AUD$2900 which showed "So the range of operating profit forecast for the next 12 months is $26.25M up to $49.25M" https://hotcopper.com.au/posts/70095656/single
With PoG now around AUD$3100 the bottom line improves by $3M (up to $5M if they can hit 75,000 ozs).
At the current rate of $2m/month debt repayment the outstanding should be reduced to $69M by the end of this December. The JV with Haoma provides an interim alternative to either starting Blue Spec or going underground for increased ounces. Things are still tight but there is wriggle room.
CAI Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
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