AYN (ASX) Ann: September 2013 Quarterly Report

This has to be one of the worst quarterlies I've seen in twelve years of following the company. Both in terms of content and how it is written.

"Leach Pads 1 to 4 will then provide enough stacking capacity for at least 18 months of operations at current production rates, and Alcyone will continue to focus on delivering efficiencies and enhancements with the longer term stacking sequence. The September 2013 Quarter delivered production of 17,038 ounces ...."

WHAT!! You mean they'll continue to produce 17,000 oz per quarter for 18 months? And if not, then how many?

"... slowing down of treatment in order to conserve cash ...."

"The processing plant was under budget and production slowed down to save money on Diesel generation .... "

"Mining was suspended for most of the quarter ...."

So, they hardly mined anything. Everything else was slowed down to conserve cash. And yet the September quarter cash cost of production was $4,554,000, the princely sum of $136,000 less than the June quarter, when at least they produced 122,728 oz.

They can talk about "efficiencies" all they like, but if all those reductions only deliver $136,000 of savings, I don't rate their abilities to deliver significant efficiencies when they start running again, and as for $15/oz cash cost: tell 'em their dreamin'.

Then you have the sudden increase in proven resources, from 1.42m tonnes at 78g/t to 1.42m tonnes at 782g/t. Wow. Doesn't anyone proof read?

Even on 29th October in their preso, they were forecasting production of 1.28m oz (slide 11) for 2013/14. That's 140,000 oz per month for the rest of the year. Good luck with that one! And to get the cash cost down to $15.42 for the rest of the year, as forecast, it needs to be $12.05 per ounce for the remaining three quarters .....

IMO the company needs to consider each announcement much more carefully before they issue them. At the moment, there doesn't seem to be any clear concept as to where the company is heading as the cash cost figures they are using are not justified anywhere (and, according to the data in slide 11 are wrong anyway: forecast costs of $22,880,161 {such accuracy!} divided by 1.28m oz is $17.88/oz) and seem totally unattainable anyway, based on the last five quarters' numbers.