Hi Red,
I don't believe the hedges will be an issue. As they will likely have sold all the gold they produced, to fill the hedge. Plus, as others mentioned, they may well do a cleanout of the mill. Though as you say, the amount is not material, considering we are 2/5 of the way into the quarter, or, 2500 ounces would have logically been met either way (even with production rates being below expectations).
Not that I am happy about the hedge. They had the opportunity to close it out for $1m profit, but did not do so.
I cannot help but be quite dispirited by the almost perfectly timed closing of the plant, just as we have seen POG and sentiment in the sector do an almost total pivot, especially as the crypto sector implodes.
In any case, I am somewhat hopeful that this large change in sentiment also helps GCYs position.
I have tried not to ponder too much about the company, until we see something concrete in regards to its future.
Perhaps they should just sell the plant for perhaps $80m (cash or script), distribute 80% of that to holders, then spin of Glenburgh with any left over capital.... 100 other possibilities of course (merger, T/O, toll treat), plus... I am not blind to the possibilities that the company is not going to relist.
For those that have not followed DCN, it might we worth taking a look at it's fortunes.
It basically had to turn all mining off and just process their stockpiles. They then got a T/O offer after a terrible quarter (well... multiple quarters) at approx $0.10 a share. Since then.... once GMD got to almost 75%, the share price has gone up over 50%, to value the company at close to $170m.
Nice big plant, a year of ore to process and.... a lot of underperforming deposits. I am in no way saying we will see a DCN like outcome, just that, its the closest analogue I can think of in recent times. I also cannot help thinking of BDC, which... after putting out a DFS, saw huge cost increases, and just said... no, cannot build, so we are for sale. Whilst holders did not really get a great offer, they did get the ability to be acquired by a larger producer (not a great one, albiet), so all holders had the ability to exit if they wanted to at what I feel was fairish... value.
Perhaps NRW will find a buyer for their holdings, plus... enable them to take a blocking stake in GCY for little or no premium etc... as I do get the feeling they want to wash their hands of the whole affair.
Hindsight is wonderful, perhaps... SL initial read of GCYs situation was accurate, he said the plant was a liability (without better grades for the ore), as in, if it could not generate free cashflow, it was a drag. Perhaps having the plant on C&A for the last 12 months would have been a far wiser path, which would still have led to the discovery of Never Never. I think SLR (which I initially bagged them), decision to stop open pit mining during COVID was very prudent. Hopefully in the years to come, I can find management with similar foresight (though hopefully SL did not leave it too late and the C&M option proves if not savvy, at least prudent/wise).
A 5 year mine plan seems a very logical goal for GCY in the medium term, unless, it gets the chance to toll treat higher grade ore.
I feel very contrite about my posts on HC about GCY, as whilst I have never advised anyone to buy GCY, my views have on balance, been too optimistic and I shudder to think that it might have swayed others to invest in GCY. I have always known it was high risk/high reward.
Good luck to all holders.
(20min delay)
