All time highs, page-306

Thank you Wombat (and others). Re. the AurumAnalytics report - it is very interesting, and puts a great context on how individual mines are performing relative to other Aus/NZ mines, but I found the geo constraints actually limiting the value of it! If I think of my current holdings: 22% of NST's production is outside Aus/NZ (Alaska, USA) and 55% of SBM's production is outside Aus/NZ (PNG and Canada). Anyway - a useful report, and certainly demonstrates the importance of AISC.

Just had another look at production updates from Dec quarter for the subset of producers (NST, EVN, SAR, SBM and GOR). Approach was to look at progress against FY20 guidance (RAG status to show how production in remaining quarters (in order to hit guidance) compares to average for previous quarters (going back 18 months)). Have used the midpoint for guidances. Have included actual production figures from quarterly reports.

Ranking (most likely to exceed guidance to likely to be difficult to meet guidance):
1. EVN - green

• Can't find guidance at the individual mine level, but total guidance for EVN Group FY20 is 725,000 oz.
• The 6 Aus producing mines running at c. 80% of 2019 average would deliver the guidance.
• Have assumed Red Lake (M&A completion in March; 7% of total forecast production) continues at current production run rate.

2. GOR - green

• GOR's guidance for Gruyere FY20 (at 50% share) is 134,000 oz.
• Gruyere produced 35,012 oz in Dec19 qtr - i.e. we "only" need to hit 96% of Dec production in order to achieve FY20 guidance.
• Given the expected ramp up in the Mar20 qtr, this should be very achievable.

3. SAR - green

• Can't find guidance at the individual mine level, but total guidance for SAR is +500,000 oz.
• Thunderbox and Carosue Dam delivering Q3 and Q4 at the average production rates for 2019, would deliver an FY20 total of c. 385,000 oz.
• This implies KCGM (Q3, Q4 only) delivering c. 60,000 oz per quarter to hit 500,000 oz for the group. Newmont appear to have produced c. 67,500 oz per quarter in CY2019.

4. SBM - amber

• FY20 guidance is for 385,000 oz - Gwalia 175,000 oz (5% reduction v. previous guidance), Simberi 110,000 oz (6% reduction v. previous guidance), Atlantic (Canada) 100,000 oz.
• Gwalia should hit the revised guidance - requires 100% of the average of 2019 production to do so.
• Simberi should hit the revised guidance - requires 96% of the average of 2019 production to do so.
• Atlantic could be at risk - it requires 118% of the average 2019 production to meet guidance (i.e. requires 26,500 oz for both the Mar and Jun quarters; however note that the Dec quarter production was at 29,100 oz - i.e. if Dec production was a valid trajectory and not an anomaly, then requirement should be achievable)

5. NST - amber

• FY20 guidance is for 980,000 oz - Jundee 270,000 oz, Kalgoorlie 360,000 oz, Pogo (Alaska, USA) 220,000 oz and KCGM 130,000 oz (Q3 / Q4 only)
• Jundee should easily hit the guidance - only requires 66% of 2019 average production to do so.
• Kalgoorlie could struggle to hit guidance - it needs to hit 118% of 2019 average production to do so.
• KCGM should be OK - 65,000 oz per quarter is c. 93% of the average that NEW were achieving for CY19.
• Pogo looks unachievable - NST needs Pogo to produce 72,500 oz per quarter for Q3 and Q4 to hit guidance. This is 188% of the average 2019 production.
• Assuming all 4 mines produce gold at the 2019 average rate in Q3 and Q4 only gets to c. 947,000 oz (c. 96.5% of FY20 guidance). This would put them inside the guidance range (920,000 oz - 1,040,000 oz).
• Think a lot depends on the Pogo turnaround.

As always, DYOR. I hold GOR, SBM and NST - and leaning towards getting into SAR (though slightly concerned at the double exposure re. KCGM).