"They have upgraded their target to 30koz and reinforced guidance through multiple announcements......"
Well let's look at the actual facts starting from the Dec 2015 quarterly. Here is the reported ore mined and gold produced from that report below.
View attachment 163438
We know that they started mining at Burbanks in the 3rd week of September 2015 so the 4,968oz was produced over 14 weeks. That's 18,542oz per annum at that rate which is fine even forgetting about the reported ASIC of $1,409/oz because we are at an early stage of redeveloping the mine.
At end of December (23rd) they announced the termination of the Mining Services Contract with Blue Tiger stating
"The termination was effected by notice served on 22 December 2015. In accordance with the terms of the Contract, the contractor’s engagement shall end on Tuesday, 5 January 2016. "
So presumably so gold may have been mined in the first 5 days of January 2016.
Then we are informed of the appointment of Pybar as the new mining contractor on 4th February and this is where it starts getting vague.
The company states that
"PYBAR will initially focus on developing the un-mined Dahmu lode on multiple levels, with stoping set to start in the June quarter. Development will also commence for the first time along the high-grade Hadfield and Jesson lodes on the historic 4 level, which is the limit of all previous production where the average grade was 27.4 gpt."
"The level of investment in upfront development at Burbanks has now been reviewed with a view to accessing high-grade areas sooner than previously planned. In the short term this will impact production for the current quarter, however this upfront investment will result in significant improvements in production in following quarters."
OK so the first statement says we are working on developing the Dahmu lode with production
expected in the June quarter and development of Hadfield and Jesson with an unspecified time frame for production on those loads.
The second statement says that the development work will impact production in the current quarter.
With blue tiger finishing on 5 Jan 2016 and PYBAR not possibly starting before the 4th of Feb 2016 that only leaves maximum of 2 months and 5 days of possible production for the quarter which as they say will be impacted by development work in the mine.
What we need to know how much gold was actually mined in the March quarter?
What's more on the 4th of August last year they announced
"Kidman Resources (ASX: KDR) is pleased to advise that it has agreed to lease and operate the Burbank’s processing plant owned by Ramelius Resources (ASX: RMS) in a move which will further reduce costs at Kidman’s Burbank’s gold mine near Coolgardie."
"The mill was refurbished by Ramelius in 2007 to process ore from their Wattle Dam project. It has been on care and maintenance since Wattle Dam was closed in December last year. Kidman will move immediately to bring the plant back into operation to process ore from the Birthday Gift underground."
"Due to its close proximity to Kidman’s Burbank’s mine the cost savings and operational benefits are expected to be significant. Milling costs will be greatly reduced compared to toll treating ore and the additional recoveries expected from the plant versus toll treating will further enhance the projects economics. "
Considering they told us in August last year that they would move immediately to process ore from Birthday Gift the company could at least provide us with some guidance on what's happening with this plant and how much money has been spent trying to get it operational. The original announcement in August 2015 informs us of a 1 year lease with an option to extend. We are not far from that first year running out and no news at all on what's happening with that plant. As mentioned in a previous post RMS in its recent announcement describes the plant as being on care and maintenance and makes no mention of the lease agreement with Kidman.
So the company needs to tell me how much gold was mined in the March 2016 quarter and at what cost. How metres of mine development was achieved during the quarter a(nd at what cost) and what is happening with the lease agreement on the Burbanks plant and if they are still working on getting it into operation and how much has been spent on it.
These aren't particularly had facts to tell shareholders. All the drill results in the world won't help at the moment because we are a mining company walking on the edge and not an exploration company who can afford to just drill and release results. The sooner they inform shareholders of what has happened this quarter the sooner the paralysis on the share price will be lifted.
As far as your comment about the "target to 30koz and reinforced guidance through multiple announcements" goes let's see how much we can build on the total production to the end of December 2015 of 4,968oz in March quarter before buying into the hype from the company. I suspect we won't have produced more than 3,200oz of gold (if any at all) during this quarter. I'll still give this mob a chance while they remain in business but they are not going to see one more cent of my money until they give us some real and reliable guidance on the mining at Burbanks (and by chance I mean I'll hold my shares against my better judgment which is telling me to sell).
And by the way specgoldbug no need to ring them, I understand they have been doing the ring around to try and get their placement filled. Haven't you had your call yet?
Eshmun
