I am not 100% sure what "commercial production" means.
Regarding "They state C1 cash costs, but give us no idea of what sort of money they are making":
This is from the December 2012 Quarterly Activities Report:
Base case production planning for FY2013 is indicating an operating budget at design throughput rates of 1.5 million tonnes milled to yield 78,000 ounces. Projected C1 unit operating costs are forecast at $829/ounce and $881/ounce after providing for royalties. As a guide total cash costs including royalties and corporate overheads, before any sustaining capital and exploration are estimated at $937/ounce produced.
Upper production guidance (83,000 ounces) at nameplate reflects slightly higher grades mined. C1 unit costs under this case would be approximately $785/ounce or $44/ounce lower than expected costs under the base case plan. The other cost measures would all be correspondingly lower by approximately this amount.
Regarding "If an expansion is needed so soon, why wasn't it done in the first place.":
This is from the December 2012 Quarterly Activities Report:
The current 1.5 Mtpa CIL process facility has been designed to meet design production rates under any combination of ore types being processed. Sustainable production above nameplate, irrespective of ore type, will require a review of actual milling capacity, CIL residence time, power supply and water supply capacities. The current plan is to settle the mill at planned production mode during the early part of FY2013 and then assess the potential capacity of the 'as built' plant. The indications are that throughput rates can be increased above the design throughput to 1.7 Mtpa as was evidenced in December 2012. This additional throughput would add a further 10,000 to 20,000 ounces per annum to the current annualised production profile of 78,000 ounces per annum.
MOY Price at posting:
57.2¢ Sentiment: Buy Disclosure: Held
