Fair assessment. Though I do take a more conservative view on...

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Polar2Bear

103 Posts.

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27/04/24

20:10

Post #: 73539542
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Originally posted by VYR: ↑

The months ahead look very promising.

With a bit of free time on my hands as I wait for 5 o'clock I thought I'd look at the numbers in the ES for a comparison with your calculations.

Looks like 2024 could easily deliver more than $40m of free cash flowIf the recent $10m CR pays off and puts us on the fast track to fill the plant that $40m will look like peanuts.

The economic assessment numbers forecast 4.4KT of Cu would be produced in the last 6 months of year 1, with year 1 starting a couple of months after the final investment decision set the ball rolling on entering contracts and mobilising staff.

Production started in mid February 2024.

Forecast monthly Cu production starting month six.

350 + 600 + 550 + 1100 + 1000 + 800 = 4,400t .

First quarter production came in at 828 t with processing starting half way through the quarter which is 27% better than the forecast for the first month and a half of 650 t.

Looks like the ES forecast for the June quarter starts with
half of month 2 and finishes with half of month 5, so:

300 + 550 + 1100 + 500 = 2450 tonnes at $12,500 = $30.6m.

which is a bit better than your 225 kt at 0.9% = 2025 tonnes at $12500 = $ 25.3m

Sept quarter.

500 + 800 +800 + 450 = 2550 tonnes @ $12,500 = $31.9m

Dec. quarter
450 + 1250 + 1150 + 550 = 3400 tonnes at $12,500 =
$ 42.5m.

2024 revenues based on that interpretation of the ES and Cu @ $12,500 comes in at $10.4m + $30.6m + $31.9m + $42.5m = $115.4m

Circa $40m of which could be free cash flow.

With current prices supporting a drop in the cut off grade and increased production together with the discovery of the potential resources in the deeps, the current gold price and potential to increase gold recovery by 55% and spot Cu prices well in excess of $12.500/t there a lot of room for upside.

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Fair assessment.

Though I do take a more conservative view on the month 10 (May) spike.

Hiring for the scale up was only posted on the April 24: https://www.seek.com.au/hillgrove-resources-jobs
The impact of extra hands should be felt only in June going forwards.

Regardless, looks to finally be a steady ship this one.

HGO Price at posting: 7.3¢ Sentiment: None Disclosure: Held
8 Upvote

0 Great analysis

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