Only just entered in the past couple of days (avg ~53), but aside from not being able to rely on company forecasts while doing your FA, it doesn't seem to be in as dire straits as many are making it out to be. I understand funds losing trust in management and selling out, and traders forcing it lower, but I don't see DCN going under any time soon.
They sold 39,315oz last quarter and received A$59.9m for maiden cash flow. Not sure of the exact payment terms (assuming 30 days), but this was not a full quarter's revenue. A$59.9m / 39,315oz = A$1,524/oz.
The average A$ gold price in the March quarter was $1,843 (~A$72.5m revenue), or even allowing for some ~A$1,750/oz hedging, there is still revenue missing from people's calcs. There's potentially ~A$10m of receipts not factored into the A$5.6m operating loss for March. Then there is also the A$10m debt repayment to consider.
June will be a full quarter's production at a similar average A$ gold price - currently $1,836, but will be higher by June 30 (although likely will make no difference to receipts).
Production forecast for June is 36,000-38,000oz, but the ounces sold could (and I believe will) be higher. Conservatively assuming 36,000oz sold and conveniently assuming A$1,836/oz sale price @ $1600/oz AISC = $A8.5m operating profit - A$18m debt repayment.
So let's say net ~A$10m loss after debt repayment + further $18m development spend, leaves A$42m cash and A$105.5m remaining debt with A$18m due in the next 6 months.
I'm fairly new to DCN and not sure how much more development is on the cards, but I did read "nearing completion" in the last quarterly. Excluding future development spend, my figures show DCN operating at a net profit after debt repayment from next quarter onward.
DCN Price at posting:
44.0¢ Sentiment: Hold Disclosure: Held
