Ann: FY21 production and cost guidance update, page-14

A downgrade in production and costs is not a surprise to me because they were clearly not going to achieve the lower targets announced in the March quarterly report. However, I thought Gwalia would do an extra 16k ounces this quarter which is not going to happen. It seems that Gwalia will only produce around the level they achieved last quarter or perhaps a little better. I was not expecting much improvement from Simberi. Only Atlantic Gold looks like producing the extra ounces I had expected.

My expectation is that the June quarter production will only be around 5-10,000 ounces more than last quarter, which all things being equal should lower AISC and improve operating margins/net cashflow. The higher gold price will also help.

However, if SBM produces at its lower total production estimate of 330,000 then they will produce 85,000k ounces, only around 2,000k ounces more over the previous quarter while if production is at the upper esitmated limit of 360,000 ounces then there were would be an extra 32,000k ounces, which is a level I see as highly unlikely given the problems covered in the update - but we can all dream I suppose.

Perhaps Gwalia may not be operating to expectations until sometime in the December 2021 quarter. I am not liking the news that there is continued grade reconciliation issues at Gwalia.

The share price will continue to struggle, possibly helped a bit by a rising gold price, until things are fixed or not fixed.

GLA.

loki