Good evening all.
I have just been sitting back over the last few weeks in absolute disbelief with what has happened to our share price,After the September quarter operation was released a 45% dump in 2 trading days. We were all expecting good numbers as the June quarter was our first quarter and it was looking pretty good being cashflow positive and month on month improvements.
We all new September quarter wasn’t going to be great when Dave in 3 of his presentation was talking about the horrible covid staffing issues ect so that already had given us a low sentiment for the September quarterly.
Then the gold pour numbers came out and had people jumping straight to fear, I also was very worried and thought of DCN and GCY , Those projects had company destroying grade issues (drilled after the fact and the grade was not there compared to recourse grade) Our grade control model shows the grade is there (huge relief for us all)
I have spoken with Dave a few times in the last fortnight and also from his presentation yesterday noted,
90k is very much still our target and it’s just around the corner he said. September was vary disappointing for us all but we are back on track with grade and a plan for tonnage (Fixing the Water issues).
Even though last quarter was a nightmare with losing so much staff and bad mining practices due to staff the losses for the quarter, It was only $2m loss and we have 30m in the bank, Everyone panicked about emergency capital raise and Dave confirmed yesterday very very unlikely. He said the mill is fantastic it’s absolutely superb with 98% recovery and we have ran it easily at 7200t a day, well above name plate with no issues at all.
So grade is reconciling 100% to resource model, mill head grade was the biggest Issue for Sep quarter with the mill feed grade down 23%, due to lack of people to operate machinery, geos, blasters ect with 2X huge covid outbreaks in the quarter.
We just weren’t moving the ore and trying to play catch up due to the lack of staff had us using 200t diggers resulting in digging a lot of waist diluting the feed. Due to low ore supply we also just milled low grade rom ore to get the mill moving. We have now have implemented changes to the way we control ore block movement and the biggest change is the new system to predict post blast ore movement’s with huge positive results right away.
We are very pleased with the quick turn around thanks to the combined efforts from McMahon and Calidus teams. As said we know the grade is there we just have to mine it properly. Again having the grade actually there is a huge box we have ticked it’s the most important milestone to validate on a new gold producer, With the stories of the before mentioned companies not actually having the grade in the ground is one reason I suspect the huge overreacted sell off, including me it’s the first thing that went through my mind, Also the low amount of shares on issue meaning anyone bigger play wanting out can drop the price substantially as we seen over the last few weeks, thankfully they have now been sold out.
Dave had a meeting with the board of McMahon and as a result the chief operating operator Richard McLeod obviously agreed to visit the site with Dave and work on a plan to sort the mining/staff issues out fast. Richard even speaking in the presentation yesterday was impressive, He said he was happy to go to site and see how the pits opening up well. It was good to get around the table with the team to discuss drilling, blasting and a plan moving forward for best grade control ect. He said it was good to spend some time on the site with the blast crew. He also pointed to the table in the presentation and said October the blast production is now exactly where it needs to be.
The workforce is now full and stable McMahon have made some changes, I feel there were some staff not fully suited to the roles and we needed better qualified staff. McMahon is contracted to us then they need the best of the best on our project to meet our mining targets.
Dave said we are now there with the grade with a few more minor tweaks to come over the next few months, but it’s improved greatly and still improving.
The water issue is going to make the December quarter below par as well but grade is where it is meant to be and the water issue will be fixed by the end of this quarter and we will never see water issues again. December quarter should be cash positive but 1st quarter 2023 will be a great cash free cashflow quarter.
Drilling rigs this week drilling blue spec west for the first time ever, some huge grades in those areas so could be some good news coming up around Xmas. More drilling at Klondyke and marble bar this quarter too.
Spear hill lithium results arnt great for the first drill holes, they have 2 very long but thin loads over 4.5km long so I suspect more drilling needed to find a decent deposit. Claudius exploring its own lithium is interesting, not sure why but Dave understands lithium is the future and we are located very close to some of the best Australian grade projects, so why not get more opportunity.
2023 will be the year for calidus!
The October gold production was 4000-5000
Is let’s say 12,000-15,000 for the quarter on the water issues is fine IMO.
All my opinion from breaking down the presentations.
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