Hello calfwhisperer,I think OBM is able to source enough "higher...

Hello calfwhisperer,I think OBM is able to source enough "higher grade" ore from the Missouri and Riverina pits that it is now more economical to stop the costly underground mining. Assuming all of Golden Eagle's ore was used in production, 158,000 tonnes of ore grading 1.91 g/t from the Missouri and Riverina pits were fed into the plant during the December quarter.

OBM's target now is annual production of 70,000 ounces, which translates to approximately 18,800 ounces each for the remaining quarters.In order to stop the cash burn, it is crucial to achieve the following milestones:
1.) The processing plant must reach 100%
2.) Riverina and Missouri deliver ore of 300,000 t at 2.1 g/t (For comparison Dec quarter: 158,000 t at 1.91 g/t)
3.) The cost needs to be reduced by about 9 million compared to the Dec quarter or 3 million compared to the Sept quarter.

These goals are ambitious, but achievable.

To become even more profitable, OBM will probably also try to expand the capacity of the processing plant if OBM cannot further increase the head grade above 2.1 g/t. An increase in capacity of around 10-20% should be enough to reach the originally planned production of 80,000 ounces per year. There are examples from other mining companies that have managed to tune up the plant with minor modifications.I rate OBM as "very speculative buy" and hold a small position. (see correction).