An interesting update. One which I simply don't believe was written by the personality that I assume, still runs WGX like a private company. Lots of honesty, acknowledgement that they the entire project has been much more challenging than envisioned... they basically say that it has been far more difficult than expected! That is scary, when almost $200m has been spent so far, and they still on believe they will achieve nameplate in another 6 months.
The best quarter was June which saw approx 190k trucked to the plant. BUT..... they also state later on, that by years end, grade should match the reserve of 3g/t. So logically.... grade is not at 3g/t currently. Lets say 2.5g/t? If its even less than that, then... I fear it cannot be that profitable yet.
190k x 2.5g/t = 475,000 / 31 = 15.3k. Or, annual production of around 61k. That is approx 65% of what they plan to reach (90k to the plant, but... that is before recoveries etc, so likely closer to 85k recovered).
That is well below the 100-110k professed for years. They are also talking about a new U/G portal to access Fender.... sure, that is great, but.. Big Bell was supposed to be enough on its own. So more capex for that, plus, how much more for Big Bell before years end? They could have easily provided guidance on that.
So.... while I am pleased that the company is starting to be more honest about their situation. There is still a lot of work to be done on Big Bell. I cannot help but be pessimistic, the way they talk about the whole project, is almost like, it has been done on the run....
WGX Price at posting:
$1.88 Sentiment: Hold Disclosure: Held
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