Kookkat - the problem is that the directors keep issuing updates stating that long term cash costs will be around $2 or $1.80 with a coal power station.
Target statement 23.01.2013 "This cash cost performance is expected to improve significantly in the second half of the Financial Year to June 2013 to $1.92/lb Cu". Announcement 21.05.2013 "At full production the long term C1 cost of the currently planned Open Pit mining and Zeta Underground is approximately $2.00/lb"
Actual cash costs were $3.10 for the month of June 2013.
They've been digging for over a year now and judging by the July update cash costs are still unlikely to be much less than $3.
Citi and Cathay were right - there are serious questions about long term cash costs and reserves.
After a year of digging in Zeta a downward reserves and ore resources revision. What happens after they've been digging in Plutus for a year?
Another month of uncertainty - will the lenders lose patience, will the Company run out of money, will there be a capital raising? A potential suitor would have to be pretty brave based on the stubbornly high cash costs.
Pray for higher copper prices.
DML Price at posting:
15.2¢ Sentiment: Hold Disclosure: Held
