Average Quarterly Gold price:Q1FY22 - A$2,400Q2FY22 -...

Average Quarterly Gold price:

Q1FY22 - A$2,400
Q2FY22 - A$2,450
Q3FY22 - A$2,500
Q4FY22 - A$2,600

Q1FY23 looks like it will average about A$2,500.

Stu Tonkin said in the last Conference Call, that CapEx and OpEx costs had levelled out when questioned during the Q&A.

So I would expect a ~10% reduction in EBITDA for the Q1FY23 (QoQ). If all things stay the same, YoY EBITDA down about 3%. Given expansion plans, a MC of 10x EBITDA would be generous but still prudent, IMHO. Currently valued at 5.75xFY22EBITDA.


Stu had mentioned that KCGM will be undergoing maintenance during Q1FY23 and Q3FY23, which will likely impact production levels.

Also that the new Thunderbox Mill will undergo a graduated commissioning, ramping up to full production by the beginning of H2FY23.

I thought their FY23 guidance conservative, in their forecast at the start of the year. They said specifically that costs were difficult to gauge given the increases during FY22. As mentioned, Stu suggested that costs have remained level this FY, so far.

At least, the share buyback allows some breathing space for the BOD, as any reports judged adversely by the market, will lead to buying support. After the difficulty presented by the COVID affected FY22, the BOD can remained focussed on the real task at hand ... production and expansion.

After FY23, they will look forward to both Yandal and Pogo at full production and preparatory work out of the way on releasing the merger synergies with KCGM.


The last Q&A question at monday's Conference Call asked Tonkin, "your 5 year plan mentions the expectation of 3 to 5 profit centres. Are you expecting future takeovers still?"

Tonkin seemed taken aback by the question and laughed, that it was something they hadn't amended in their presentation. He said all future growth is aimed at organic growth. There are no plans for any takeovers in the future.

Kalgoorlie still represents a gamble. However as time goes by and more CapEx spent on pre-stripping to access those lower sections of the Golden Mile, that bet is being resolved. They sound upbeat on Kalgoorlie and moreso as time goes by.

Note well in the Financial Reports Presentation:

"Fimiston Underground Inferred Mineral Resource increased by 1.0Moz - first glimpse of new world class system at KCGM" and

"Norther Star's ongoing exploration success highlights the significant opportunity that exists within our Tier-1 portfolio particularly through the extension of known mineralisation at depth at KCGM."

How many times have you heard of an old successful Gold mine being rejuvenated and drilling success identifying extensions of the same rich resource?Kalgoorlie already has a 40Moz resource with 3Moz of ore stockpiled. Fingers crossed for future drill results of high grade ore finds at Fimiston South and Golden Pike North. I expect this will be the trigger for the KCGM Optimisation Plan go ahead.

Fingers crossed for high grade extensions at Pogo and nearby Goodpaster too.