Ann: March 2021 Quarterly Activities and Cashflow Reports, page-23

Good post AJ.
After re-reading the quarterly, there are both some positives and some negatives.
On balance, I am slightly disappointed, particularly regarding the staffing issues. I realize that this an issue facing the whole sector (sort of wishing I could simply jump ship and move to W.A, as seriously, there are jobs a plenty right now for those that want to work!)
However, until they have a good pool of staff, production is going to be less than planned. Hence their admission that gold sales will be well bellow the DFS target of 30k for first half of 2021.

If they hit their low end of guidance, for sales, or around 15k for the June Q. That will see them, have at best, $3-6m of free cashflow.
My guess is AISC around $1900-2000. All sales are at spot. I am actually quite surprised at this cash/bullion position. Around $22m shows that they really did meet the budget for the plant refurb etc. Plus the pre-production costs are under control, albeit, partly due to simply not running all mining operations at 100%.

Stock piles of 6.5k means they have around 1 month of feed, which is basically what they planned to have. It would not surprise me if this dips slightly in June, as, assuming the plant runs close to capacity, and they still have challenges with staffing, they will draw down on it a little.

Golden Eagle grades have started quite well. The pic of the face grades is pleasing.
Open pits grades are still below what they need to be, but they should/will rise (though I note, that the infill drilling is showing that on balance, they are going to be met.... we will see if this improves).



The level of detail in the quarterly was actually quite impressive. They have achieved a lot, considering they are a relatively small operation overall.

The exploration results really do show that there is going to be a longer mine life, however of course, OBM needs to steady itself. This is a critical period, which is often where new producers struggle the most (obvious I know, yet....).
The important of having everything ready before the plant is turned on, simply cannot be underestimated. Having slack built into the operations is so bloody important.

The weather event is a tad unlucky, and as they are just starting up, it would be doubly difficult to deal with. It is what it is. These small issues, tie together with staffing, etc. Even not enough room to store ore on the ROM. They will be solved. If there had been a major issue with grade, then I think my post would be very different.

I honestly think that OBM need to be careful how they manage their news flow.
If that means monthly updates, so be it (for better or worse). If the current contractor cannot find the staff, then.. maybe bring in a second contractor, messy, sure, but.. the mine plan needs to be followed. Hopefully the new MD is on the ground right now, driving a rig.
As I note, across all my gold producers, they are investing heavily on staff retention. That is going to be hard for OBM in the near term, due to just starting up.

We all talk about OBM being a T/O target, at this stage, I doubt it makes sense for an offer to be made. Companies want certainty, and OBM still has a few things to prove. That being said, Aurelia's T/O of Darggs Gold mine, shows that some of the smaller producers, are willing to take on more risk, than the bigger players (RMS/SLR). Aurelia snaps up $200m Dargues gold mine

Sentiment changed to hold, because.... that's what I plan to do with my slightly reduced holdings (I mentioned I sold some a few weeks ago).
Just too many bad memories of other developers failing...