Whilst pleased to see an update today in the knowledge that SB hasn't been sitting on his hands of late, I can't say I was impressed with the distance involved with getting the ore to the chosen processing contractor nor the reduced amount to be processed this year.
Has anyone actually considered the likely haulage costs? 800 km one way to Lorena, 1,600 km return. For example, a double road train with 42.5 tonne capacity haul would entail 423 trips to and from Lorena to process just the first 18,000 tonne.
Lets say at $4 per km that equates to $6,400 per round trip which equals in total for 423 trips a whopping $2,707,200 not including cost of mining, IMO. As for processing costs which aren't likely to be better than last year's Maroon deal, so lets say $1,000 per oz (compared to about $850 per oz with Maroon). The sums based on 3,580oz from
18,000 tonne for the year at POG at $2,650 look like this (to me):-
3,580 x ($2,650- $1,000) = $5,907,000 excluding mining and haulage costs
So,
$9,487,000 worth of gold less cost of processing ($3,580,000) and less cost of haulage ($2,800,00) excluding the unknown cost of mining 43,000 tonne doesn't leave a lot for corporate costs does it?
$9,487,000 - ($3,580,000 + $2,800,000) = $3,107,000 excluding mining and corporate costs isn't much of a portion into LNY coffers.
Pretty poor result IF my calcs and assumptions are close. Considering LT holders have been waiting for years for this company to become a miner and given today's POG, this outcome is far from great. They have sat on their hands way too long and clearly encountered difficulties in finding a third party processor in such busy times. Otrocious treatment of SH. Glad I sold more than half my shares this morning.
The only reason why I imagine anyone wanting to retain their shares in this stock through thick and thin is due to a dream of SB someday acquiring a processing plant paid for by BCP and renting it cheap to LNY and eventually selling the company. I can't see any other reason to invest LT in this company. All I see is part-time mining happening with massive associated costs going out the window, dubious office charges into BCP coffers, minimalist exploration and PR coupled with plenty of nepotism associated with the Ashford coal project (which I first overlooked)... oh, and dreadful one-on-one communication with shareholders.
There will be a further 25,000 tonne of ore mined and stockpiled (if all goes to plan) ready for hauling and processing next year. But with more than 65% going out in costs, the revenue is not great. LT holders would want to hope in hell something changes dramatically soon, because this situation leaves a lot to be desired. I'm glad to have sold what I did. I had high hopes but they were vanquished this morning with today's ann. Without any good news re a potential plant acquisition, I can't see the SP getting anywhere near last year's peak. I hope to be proven wrong for the sake of some of you guys that have been loyal for for a long time. But LNY isn't being run like a proper gold company should and SH deserve far better!
AIMHO and happy for anyone (anybody) to pick it to bits. TBH... I find the result of my figures hard to believe especially when mining and corporate costs aren't factored in. Would love for someone to put into some other perspective coz the above doesn't fill me with joy.
