With gold produced in Q2 being up around 16.6k ounces over the previous quarter (an increase of 15.5%) when AISC was USD1059, it is pretty clear that costs in Q2 will have fallen further (all else being constant). My guess is that AISC will be under USD1000, and perhaps as low as USD950/ounce.
However, I have my doubts that they can sustain such a low AISC because the AISC reduction was due primarily to increased production from Nzema and Agbaou which probably will not be able to maintain the higher production levels into the future. Nzema's outperformance is probably due to the company purchasing higher grade ore to blend with their lower grade ore or because they have hit some higher grade areas in their ore body. I am assuming that they also mined some higher grade ore at Agbaou because this plant was already running at full capacity last quarter. Youga's production is falling and as a consequence its costs are rising.
The new factor going forward will be improved costs from the Mali operations (and possibly output?). I think that will ensure that they continue to produce at an AISC below USD1000 over the next few years.
Those 16600 extra ounces produced in the June quarter has a value of around USD21.5m. I do not know how many of those ounces where sold during the quarter, but if only an extra $16m were received then perhaps EVR's net cash position improved slightly as at 30 June.
Only another day and all will be revealed.
loki
EVR Price at posting:
88.5¢ Sentiment: None Disclosure: Held
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