DCN (ASX) Ann: Mt Morgans Operation &amp; Corporate Update

Originally posted by eshmun: ↑

Just looking at DCN's forward sales commitments from the 2018 annual report (see below).

Unless they have hedged more since then (which I can't see that they have....does anyone know of any more hedging commitments they have taken on since this report?) the company seems relatively free to take advantage of the current gold price.

Hard to know from the table below what exact forward sales commitments they have for FY2020 but at worst it looks like 51,999 ozs at $1,782/oz.

If the preliminary FY2020 guidance of 150kozs-170kozs at $1,350-$1,450/oz is to be believed there are still potential margins of around $400-$500/oz to be made on this production, ie $60 to $80 million in operating cash flow.

At 53 cents that is a market cap of $119.6 million and an EV of around $162.2 million if the company's $20 million debt is paid this quarter and their cash stays roughly at the same level.

With 1.389Mozs of proved and probable reserves that amounts to an EV/reserve oz of A$116/oz. Average across the sector is more like US$325/oz (NST is more like US$850/oz according to some charts I've seen.....would need to go and verify that for myself). I won't calculate how cheap the EV/resource oz has become today....and by the way the reserves are already based on a revised grade at Beresford of 3.7g/t, 5.0 g/t at Allanson and 1.2g/t at Jupiter.

No wonder the market analysts were asking about progress at Allanson!!!

If the grades at Allanson and Jupiter can stand up and Beresford can be put back on track some lucky people will do very well today.

I wonder who they are going to merge with? Esh

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Only seeing FA here today so trying to tie them to the chart...
40ish is the main support area pre Aug 15 after crashing thru the 80c level...

Accumulated @ 59 and 51.5 on close today as am confident there will be a bounce when the panic subsides hence will add if sub 50 tomorrow...
FEW I have seen fall over 65% in a day without reasonably TERMINAL news and don't think this is the case here and I am in the camp of a MUCH higher gold price in the not too distant future and surely that would be a plus if it eventuates so the hedging info is interesting...