Using the 2016 DFS for Matilda assumptions with the following adjustments:
Mine life: 7 years (unchanged)
Annual production: 101k oz (reduced to 77k - 89k as per today's FY19 guidance)
Gold price: $1,600 ($1,650 just to be conservative)
AISC: $1,160 ($1,250 - $1,450 as per today's FY19 guidance)
Discount rate: 7% (unchanged)
Preproduction capex: $32m (unchanged, already spent)
Based on FY19's guidance, NPV is $60m - $181m with sp ranging $0.048 - $0.143.
If just basing on June qtr's AISC and realised gold price, NPV is $70m with sp at $0.054 which is exactly the closing price today noting that sp dropped directly to 0.055 this morning immediately following the ann. One can't help thinking the insiders must have known this and determined the sp before ann release.
The ann claimed the lower production and higher AISC was due to transitional ore and fresh ore from the new M4 pit. Don't tell me the management didn't know this in Apr and wouldn't be able to warn the market about it. Had they been honest about it, the sp wouldn't have gone up to 0.100 and today's shock wouldn't have been as bad.
The question to myself and to all of you is: would you buy at below 5c?
BLK Price at posting:
5.4¢ Sentiment: Hold Disclosure: Held
