Damo, good post but here’s a bit of analysis on the actual quarterly results and some of my observations….
Column 1
Column 2
Column 3
Column 4
0
Q4 13/14
Q4 13/14
Q1 14/15
1
Forecast
Actual
Forecast
2
Opening Cash
19,847
19,847
17,539
3
Exploration and Development
(1,248)
(219)
(158)
4
Development
(766)
(1,173)
-
5
Production
(4,732)
(237)
(6,558)
6
Admin
(409)
(891)
(5,551)
7
Interest Received
-
168
-
8
Other
-
44
-
9
Total Cash Outflow
(7,155)
(2,308)
(12,267)
10
Closing Cash
12,692
17,539
5,272
11
Production (lb)
764,000
409,555
704,022
12
AGS 25% Share of Production Cost / lb
6.19
0.58
9.32
13
Total Production Cost / lb
24.77
2.31
37.26
IMO, the quarterly accounts are not portraying the whole picture. The actual cash position is overstated because the production costs seem way too low for the quarter (on a cash basis). Although we only produced 409,555 lb or 54% of forecast, actual production expenses are only 5% of forecast.
However, there is no revenue forecast for the coming quarter? Only cash outflows. That seems a bit bizarre. Are we just stockpiling and not actually selling any yellowcake?
I have estimated production for the next quarter at 704,022 lb by extrapolating June volumes (i.e. 234,674 lb *3 ). Not sure how accurate this is, but in the absence of a volume forecast I had to assume something conservative.
Now, this will give us a combined actual/forecast production volume of 1,113,577 lb at a cost of $6.795m or $6.10/lb for the 6 months from April 2014 – Sept 2014. This equates to $24.40 per pound for the JV – which is well below what we were told in the revised start up plan issued in January 2014 (approx. $40.13/lb).
IMO, either the production costs are not as high as they are said to be, or they are not being accurately reported in the Quarterly Report.
AGS Price at posting:
16.0¢ Sentiment: Hold Disclosure: Held
