There are two operational teams at work in two diverse locations - in two separate entities (at present). This means that the same dedication and attention to detail is in place for the company and shareholders as any responsible company would have it. This is not spin it is simple mining practice.
Key management has not dropped the ball at Coolgardie however I do explain how resources were earlier diverted later in this post. I am digging for the truth here and sharing it for free when I don't have to. I do it for everybody's benefit including my own.
It is my understanding that swapping 'cash cost' components from one entity to another would be a criminal offense under corporate law in Australia. Therefore this will not and would not have happened. No point and no upside so why would they expose themselves to such a risk?
Forgive my blunt manner if you talked to me one on one you would find I am not like that and not a bully either. Would be happy to talk to Alfie anytime and calmly explain our misunderstanding (or cop an earful) - and share some additional knowledge with him.
Your argument has some merit however in this regard staranalyst:
Expansion into the pits and The Mount caused budgetary constraint on Tindals which was performing strongly at the time nearly two years back. They needed to do this to expand and de-risk ore supply. So be it this was a growth pain that resulted in this quarters mishap and ask any miner in this type of operation and they will tell you it can happen - or not and that chances have to be taken like in any business. Later they raised serious capital to accelerate development of the entire Coolgardie / Widgee / TI operation ahead of discovering the CRE opportunity.
Funds that may have adequately de-risked Tindals development were diverted to ensure CRE Chatterbox trend was developed in 17 weeks (stunning), and before that via a loan to stop the creditors (and Chinese) moving in - was diverted away from The Mount, Tindals and the Pits to 'some' degree. Certainly a lot less than what was intended at the time of the capital raising and I think this is a major source of frustration for investors who have had their pay day delayed. We saw the risk and I pointed to this when the news broke, in here as well.
The purpose was for a bigger picture and longer term increased upside for the company and shareholders. FML are building a mining house. They have almost fully absorbed CRE and will balance out as they stabilize production and costs. They have managed the cash flow carefully and invested heavily and moved a long way forward in their plans in a short time. This is not the achievement of criminals or mugs. The morale is high and the team is getting on with it for us all. This move was bold however they are in the process of pulling it off and the market would understand the future better if they analyzed this fully. FML are over the hump now, just.
The aim as far as I can see is to: 1. Get CRE underway and cash flow positive with a massive turn around. Mostly complete but sustainable performance yet to be proven. 2. Maintain Coolgardie as southern engine room - hiccup certainly encountered however pits saving the day - and now development slows to almost nothing at Tindals to contain costs and allow fully researched and de-risked next move U/G. 3. Continue to develop The Mount albeit at a slower more cautious pace. 4. Continue to explore the very exciting TI gold camp. 5. Continue to explore the Greater Coolgardie gold camp. This latter one is stepping up behind the scenes.
The whole picture is being developed at the same time and yes the Board would have been initially stretched during the T/O of CRE in line with growth pains and re-staffing issues as the team build was achieved.
F&B I am following that up have not spoken to Paul Fromson as yet as he is just getting settled. Will try to cover this in the report but no promises it would be better coming from FML. The Tindals work was greater than investors and readers here realize and I was not made privy to this while on site.
On the geotechnical issue I have sought further detail and discovered that the Tindals area they were in sheared off - a fault and this dropped off the grade in the Tindals area - which was made up for in head grade at 3MH by higher grade from the pits. They had planned Cyanide and budgeted for de-watering and all the associated work - but all additional cost considering their U/G took that turn.
This can be part of mining - this is a one time issue here at this time. Rapid expansion necessitates budget decisions I have discussed this with unrelated professionals before completing this post as a service and to add to my own DD certainty.
The quarters ahead look just fine to me and I am saving the detail on this for my report and members at this time. Briefly; Dreadnaught and Alicia now going ahead and ore supply is secure for the mill. Costs will not blow out more this was in fact a once of and costs will drop back provided other inputs and consumables do not blow out - which would affect the whole industry.\
Cheers, CW DYOR&DD
FML Price at posting:
4.6¢ Sentiment: LT Buy Disclosure: Held
(20min delay)