Operating expenditure ie not including the $1.1m spent on fixed assets (no idea what that is about) was $20.484m. Ni production was 1.58m Lb. So cost per pound $12.95.
Had they stayed within budget of $15.75m and produced the 1000 Tonnes of Ni they were supposed to, it would have been $7.16.
Q3 was supposed to be 1500 tonnes which would be under $5. The key thing that should be delivering the increase in Ni production and therefore the reduction in cost per Lb is grades, as yet they have not achieved the grades promised. We need to know why as this is the most important factor affecting profitability going forward. Mining Plus were involved in producing the LOM, which supposedly used very conservative assumptions.
We need a proper explanation of all the shortfalls / over spends. Including why Cash and Debtors has fallen by nearly $10m when negative cash flow is only $4.5m.
I spoke to Alan Jury about this. Guess what, he can't give us the answers at the moment - no surprise there. However the company is taking it seriously and answers will be forthcomming, most likely by further ASX announcement.
There is clearly a lot wrong with the company, it sounds as though the review team are a bit overwhelmed by it all, but they will get to the bottom of it given time.
I thought we would see carnage on the share price today, but it looks like most people are prepared to hang in there and give them a chance. I bought into this when it was being touted as one of the cheapest Ni mines in the world, it did not deliver under the last management, it has not delivered under this management, however, unless both managements have managed to hoodwink independent reviewers of the resource, the value must be there, it is just a matter of digging it out of the ground properly! Something Aussies are good at and clearly something the Chinese dominating our mine at the moment are not good at. There is hope hang in there
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