Nice rebound off the 21 cent low - there is an optimist born...

Nice rebound off the 21 cent low - there is an optimist born everyday.

As I said after the March quarterly report, the main issues have been ore grade relative to cost of mining with a high strip ratio.

I hope they tell us if they have sorted out the grade dilution issue raised previously, but it seems the answer is no.

By the looks of things actual outlays on mining be would higher than what was budgeted because instead of the 8:1 strip ratio they forecast in the quarterly the strip ratio was around 11:1. Since gold production only 5.3% higher than last quarter but at a lower strip ratio, the AISC should be down a bit (unless there were some high maintenance costs related to the mill/crusher) from $2000, say to around $1800. So they would have have made a loss on their mining activities to which one needs to add interest payments, exploration and admin costs, so they are probably down around at least $10m for the quarter.

They have borrowings, but I do not recall what the repayment schedule says - some $36m was outstanding at end March. I think the lender will be looking at them pretty closely for a possible CR top up soon, unless BLK can convince them they are going to get on track.

It would be good if Martis would stick to posting his views based on charts rather than what some company PR guy tells him. He obviously does not understand the mining industry (not saying I am an expert either).

Plant is operating OK, when its not sick/in maintenance. The gold recovery rate is pretty good, and the mill is getting close to maximum capacity. They just need to get average up to say 1.8 g/t to break even. Probably need to get average grade of 2g/t generate funds to be able to start repaying the loan from cashflow, but for now they can use some of their cash at bank from the last CR to do that.

They have some hedging at $1644/ounce, which is a help given the current gold price.

Good luck all.

loki (this is the do or die quarter, well the death will come later if they do not hit targets)