Alright, so not to dwell on the raise, enough has been said about that, what I want to talk about are the “facts” - well as close as we can get to facts, and this will depend on how much merit you give the CEO and how much faith you have in his words.
Doomsday speculation has been rife and apparently we should storm head office with our pitchforks, so I thought I would try and temper that with a breakdown of what was said in the interview video at
https://hotcopper.com.au/threads/video-ora-banda-mining-set-to-undertake-21m-placement.6101351/
The way I see it, the
new CEO, Peter Nicholson, has come into the company and inherited any issues that we are facing now. In turn, he has my trust to sort these issues out, and my trust is now his to lose.
Let’s get into the bits we care about - production details - and I will skip what is in the past and known (shitty ore and we needed money to help cover costs).
0:15 -
“The open pit mining has been going very well. We’ve been doing our own mining, so it means we hire the equipment from a provider and they maintain the equipment, but we provide the operators and we’re very happy, and we are slightly ahead of where we would be under our DFS so that’s been going very well”
Ok, so “slightly ahead”… What does this mean? 2.5%? 5%? 7.5%? Or > 10%?
You can make your own decision, but for me, I am going to go with 5%.
0:32 -
“We also do actually have an underground mine in addition to the Open Pit, so that’s been problematic initially, but for the last month and a half it has been outperforming (video posted 6th June minus 6 weeks = ~26th April) and getting back on track, so by the end of the financial year we should be where we said we would be, so that’s a positive as well.”
What does “out performing” mean? 5%? 10%? 15%? 20%? Or even 25%?
You can make your own decision, but to me, “outperform” means greater than 10%, so I am going to go with 15%.
0:48 -
“Yeah, so we just mobilised some equipment to the Missouri mine, which is another open cut mine. The good thing about the Missouri is that it’s hard rock from the outset. Normally people are wanting the soft rock, but in our instance, the riverina oxide that’s had a lot of clay component, and that’s been slowing throughput through the mill, so the additions from the Missouri material should allow us to get up to nameplate capacity and start producing the gold we said we would. So very much looking forward to that and expecting first ore out this month”
Doesn’t explicitly state “shitty ore no more”, but it is an excellent mitigant for the situation we have at Riverina.
Agan, this was posted 6th June and ore was expected that (last) month, so the company should have a clear indication of how well that is performing.
In saying that, I refer you to the following announcement from 1st July
https://hotcopper.com.au/threads/ann-change-of-directors-interest-notice-x-3.6158861/ which is 3 directors participating in the SPP to the tune of $30k each.
As per my other posts, there has been good buying from the directors, to the tune of about $340k in the last year (happy to be fact checked on this).
1:30
“We built a smaller camp up there, and that enables the workforce to be close and not have to commute for an hour and a half each way every day, so that’s working out really well for them, and that gives us more productivity, so it’s nice they’ve got a new camp, and we’re getting the workers to and from camp quickly.”
Ok, so I don’t know what hours they are doing, but we can do 2 lots of math.
- 10 hour days, or
- 12 hour days.
If anyone can provide any guidance around this, we can use those as our baseline.
Using the trusty percent calculator -
https://percentagecalculator.net/ > “X is what percent of Y?” calculation.
1.5 hours each way = 3 hours per day.
So 10 hour days - 3 hours travel = 7 hours work.
So “7 (hours) is what percent of 10 (hours) = 70% working and 30% of the work day lost in the commute.
For 12 hour days, it is 25% of the work day that is lost.
If the new commute is 15 minutes each way (30 mins per day), this means that:
So 10 hour days - 0.5 hours travel = 9.5 hours work.
9.5 hours is what percentage of 10 hours = 95% working and only 5% of the work day lost in the commute.
On a 12 hour day, it is about 96% working and about 4% lost in the commute.
I’ll absolutely take that.
1:50 -
“That’s right, as I said we’ve been mining really well, and we’ve got plenty of stockpile sitting in front of the mill, but with the clay that’s coming out of Riverina, we haven’t been able to put that material through the mill as fast as we had thought originally. As I said, with the Missouri material coming, we will fix that problem, but we have deferred about 15,000 ounces.”
https://www.google.com/search?q=deferred meaning
The gold hasn't gone anywhere, it just means we get the money later.
Yes, the POG did come down about $150 per ounce since the video was recorded, but it has also bounced back about 50% from the lows, and is expected to continue to rise towards the end of the year (and some people speculate it will keep rising next year).
So yeah, we may take a $75/oz hit on that, but that hit isn't as bad as it could have been, and now the company is cashed up, may choose to
defer selling the gold until the POG increases. Who knows...
3:20 -
"Well with the material from Missouri we should become profitable. It's all about throughput for the mill for us, and that material should be the missing piece, so we're expecting to become profitable from July."
As I said, my trust is his to lose, and this is the statement for me that he has put his credibility on.
3:50 -
"You never want to be promising something you can't deliver on in the future, but I think we are in a position to perform, and I think it's incumbent on the management team to do just that."
Here is where he doubles down on his bet to keep my trust.
4:12 -
"Look, I think the difference for us is we are debt free, have great infrastructure in place and we have an enormous land holding of over 1300 square kms to explore, and it's highly prospective, so we're sitting there with a large number of exploration targets in front of us, some of those are more extensial (? extend?) for us in nature, so increasing existing deposits, and others are true green fields, which could be step changes to the business. So I think we've got a really good mix of 5 year mine life, debt free and a really good opportunity for that step change through the exploration".
This brings us on to Iguana
https://hotcopper.com.au/threads/ann-initial-drilling-confirms-iguana-resource-potential.6129731/ which had the following results:
Assay results returned from Iguana to date include:
o 9.0m @ 7.6 g/t from 181m (Including 7.0m @ 9.6 g/t)
o 30.0m @ 2.2 g/t from 31m (Including 23.0m @ 2.7 g/t)
o 21.0m @ 3.2 g/t from 69m (Including 1.0m @ 41.3 g/t & 7.0m @ 3.5 g/t)
o 32.0m @ 2.0 g/t from 35m (Including 13.0m @ 3.1 g/t)
o 11.0m @ 5.0 g/t from 196m (Including 3.0m @ 16.1 g/t)
o 10.0m @ 4.4 g/t from 164m
o 10.0m @ 4.0 g/t from 72m (Including 8.0m @ 4.8 g/t)
o 8.0m @ 4.8 g/t from 44m (Including 5.0m @ 7.3 g/t)
o 8.0m @ 4.5 g/t from 69m (Including 2.0m @ 16.24 g/t)
o 10.0m @ 3.3 g/t from 136m
o 4.0m @ 7.9 g/t from 68m
o 12.0m @ 2.6 g/t from 28m (Including 8.0m @ 3.4 g/t)
o 4.0m @ 7.6 g/t from 84m
o 6.0m @ 5.1 g/t from 32m (Including 2.0m @ 14.2 g/t)
o 23.0m @ 1.2 g/t from 124m
o 2.0m @ 13.6 g/t from 136m
o 4.0m @ 6.2 g/t from 38m (Including 2.0m @ 11.9 g/t)
o 15.0m @ 1.6 g/t from 27m (Including 3.0m @ 3.6 g/t)
o 10.0m @ 2.2 g/t from 123m (Including 2.0m @ 8.1 g/t)
o 5.0m @ 4.1 g/t from 70m (Including 2.0m @ 9.7 g/t)
I won't reproduce the thread there, and I strongly recommend you read the report, but this is an excellent set of results.
Yes, there is a lot of speculation about the mining wardens verdict, but this was initiated some time ago and the company is / has appealed that decision. Since that time the board and management have decided to invest money in the ground, and they have no doubt done this based on advice from their lawyers.
It is their reputation and jobs on the line.
The share price did nothing on the back of this announcement, so I think it is safe to say that this gold is not factored in to the current valuation.
I hate to say it can't get much worse, because of course it can, but I think the risk to reward on this is such that I have almost doubled my holding in the last month, and now my average is $0.189c, down from $0.21c.
We are not out of the woods yet, and there is a lot riding on the next production update, but I am confident that from the news that has been put out, and the words said by management, and my interpretation of what's been said, we should be in a good place, and most (all???) of the declines should have stopped now.
I would love to hear your thoughts, especially your negative ones, with facts preferred over opinions.
I hope we can all make some money, or at a minimum recoup our losses no matter where you bought.
(20min delay)