I was initially disappointed with the headline numbers, net gold...

I was initially disappointed with the headline numbers, net gold produced down again against expectations, and no positive cash flow. The key thing however is for once they show improvement to December close to the level forecast with production and strip ratio. I had to reread my comments on the previous quarterly and I had noted there that the language they used was all future tense, that they would gain access to the HG ore body this quarter, and all their forecasts were for the next 3 quarters. So I would have to admit they did what they said they would.

The improvement is also all based on the open pit figures, the drop in underground was expected, and the 6koz from underground last quarter boosted the total production figures. Now we see in Dec the figures long predicted, higher grade (slightly) lower waste costs, and the strip ratio forecast to head lower.

It is good and fair that they release this information quickly to the market now, (the first of my gold investments to do so, compared with BLK being last in previous quarters). AISC will take a bit more time and effort to work out so I am not surprised it is not reported here, and I am more interested in the cash flow given the financial risk here.


Key points for me.
Net cash unchanged (need details on movement of working capital vs cash spent on exploration/development), this is a $10M improvement on previous quarters. Over 15koz production this is a cost improvement of $666 /oz.

You could therefore estimate that AISC must be less than the price they received for the gold. It is a bit more complicated but I am more interested in cash flow including all spending than AISC which can be manipulated a bit by timing of expenses and selling.

Simple calc on future cash flow... first 2 months were same as previous quarter, losing 2/3 of $10M balanced by Dec which must have positive cash flow of 2/3 of $10M. If this is repeated for 3 months of next quarter then equates to 3*2/3 * $10M or $20M cashflow...

I do not expect this $20M, but it does finally confirm what they have said for the previous quarterly. There are lots of details missing until we get the quarterly (for example they may just owe more bills for January). However even half of this would see $10M per quarter, which is equal to the entire market cap in 4 quarters! Others post here that there is no way that BLK can make a profit on the mines, well here it is... (with conditions).

It is just preliminary now, but if this was realised next quarter with confidence going ahead there is no way the price would stay at 10c, I would consider this a buy, (although the risk is still high that they fail to deliver as previously, due to 'unforeseen' occurrences) Fortunately with the suspension we do not need to make these decisions or even speculate further until the details come out.

Please note that all the above is just from my quick read through and doing numbers in my head as I read, it is not as detailed analysis as I do for a quarterly, since there is no point while stock is suspended. I hope it gives some examples of how you can actually (cautiously) use figures given out like this to think about your investing. Much more useful than arguing about semantics.

I see this announcement as finally showing a taste of evidence that what BLK claim in production for FY18 is possible and what it could mean. As always DYOR, my comments are my own opinions (in this case hastily prepared) and likely contain mistakes.