Scream The obvious fear is that mining will be disrupted again...

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loki01

11,125 Posts.

632

04/02/16

14:10

Post #: 16941204
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Originally posted by scream ↑

Just want to test some of my own thinking and tumble was bugging me to do so. I have been sitting out of hot copper a bit because i've found it to be a bit of a fish bowl lately. I don't think a huge run is imminent nor do i think that the company will fail. I think it has a good medium to long term outlook with sensible management adjustments which seem to be being made by a new experienced team. The problem is a history of poor performance and a need to prove some reliability.

There are up rampers and down rampers on here and i'm often concerned of the agenda of certain people.

With regards to the comment above what is the rationale for this assumption (need for 13k per quarter at aisc of $800 with gold price of $1100). If we do some basic maths on this it would give us 39k per quarter at a profit of $300. Which by september would result in revenue of $35.1mil (all in USD). Given that the debt facility is approximately $7.4mil per quarter then there would be a profit of approx. $12.9mil in 3 quarters (35.1mil revenue - 22.2mil repayments). This would suggest there is significant slack in any of these numbers and that it may be inciting fear in people by suggesting we "need" very good numbers. I would also suggest that these aren't just minimum required numbers but actually a very good result!

Additionally paying down debt facilities is a very good thing. Based on repayment rates and interest we 'seem' to be paying them down rather quickly. If we are legitimately improving aisc and production then i am genuinely optimistic. We simply need to overcome the hurdles of previous administration which destroyed all confidence in this company.

Put another way. If we can repeat the march quarter of last year (which was mid management shamozzle) of 30k oz and rather average. And we can keep it to a $900 aisc at an average of $1100 gold price (i'm making some quite conservative estimates) then we'll have revenue of approx $6mil during the wet which would tighten our runway a bit but by no means put the total cash balance at risk.

All i'm trying to say is that i don't think its doom and gloom but it prob won't take off right now. It has some good upside and take it for what it is.

I also disclose that i say this as someone that first bought at 11c and i understand the significant frustration of those that watched pb almost destroy a promising company.

Good luck to all. DYOR and please correct any mistakes you feel i've made (or assumptions you feel are flawed. I have only used publicly reported info).

Scream.

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Scream

The obvious fear is that mining will be disrupted again during the wet and the ore grade milled will be low - obvious consequences flow as they did last year.

Furthermore - the AISC do not cover feeding management/head office, capital expenditure or exploration costs.

Yeah, things will remain tight and my fingers are crossed.

loki (also trying to cross my toes)

BDR Price at posting: 15.5¢ Sentiment: None Disclosure: Held
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Scream The obvious fear is that mining will be disrupted again...

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