Next Shipment, page-295

These numbers AJM are releasing are really bugging me.

Firstly was the Q2 projections made in Q1,

Exploration costs of 0.3m became 0.55m (+0.2m)
Production costs of 15m became 19.7m (+4.7m)
Staff costs of 4.2m became 4.3m (+0.1m)
Admin/corp costs of 0.5m became 1.5m (+1m)
Out by about 6 mil ($26 mil) or 30% for an output of 42.4kt.


Now, we have Q3 projections made in Q2,

Exploration costs up from 0.55m to 1.38m (+0.83m)
Production costs up from 19.7m to 25.3m (+5.6m)
Staff costs up from 4.3m to 5.2m (+0.9m)
Admin/corp costs down from 1.5m to 0.7m (-0.8m)
Loan interest payment of 15.39mil (I don't understand that figure.... 180mil * 0.15 = 27m / 2 = 13.5m)
Plus new extra costs.

Just looking at production and staff costs alone,
Going from 42.4kt output for $24 mil in Q2 to 45kt output at $30.5mil in Q3 is going backwards.

Remember the quarterly statement 'impressive average operating cash cost of US$392 wmt produced (FOB basis)' which I get roughly by $24 mil / 42.4kt = 566*0.7 = US$396/t.  The current operating cash cost for Q3 going of the projected numbers for Q3 would be $30.5 mil / 45kt = 666*0.7 = US$467/t. How they can write these increased next quarter projections and then in the accompanying activities report claim 'Operating cash costs are expected to reduce to between US$350 to US$380 wmt in H2 2019 based on recent increases in production volumes, improvement process initiatives mainly focused on process plant recovery and more favourable mining costs' is beyond me.

Perhaps AJM are still spending on plant optimization works hidden in the production costs and staff are up also due to that.  Who knows.  What I do know is that 40kt sold per quarter at US$600/t (US$34m in revenue) isn't going to cut it by a long shot at these projected costs, especially if SC6 prices come down to the US$550/t floor price.  Simply put, costs need to come down significantly and production up.  45,000 wmt is still only near 80% of nameplate output. ​