Ann: Production Update and Lithium Occurrences, page-16

Ok... so..

For me the update is quite a mixed one.

Positives... they are slowly improving the mill performance, albeit, I think it's clear that grade is still the major issue.
My basic numbers say that if the grade was meeting the DFS (2.4g/t) at 80% plant capacity, they should be producing at least 18.6k per quarter.
Roughly 74k p.a. We know there are still issues they are trying to mitigate, which should be doable, though... I have a feeling a lot of it is to do with staffing, maintenance and the killer... grade.

With the recent sale, $11m cash should at the least, ensure there is no need for another raising in the near term....but really, it's sort of do or die, as the market will stop giving them money if they cannot steady the ship.

That's all I have...

Negatives...
As above, grade. Not high enough.

Golden Eagle not going to extend (was really hoping they could).

Staffing issues continue and there is no clear statement that they are on top of it, like the last announcement discussing the issue.
Though I note CMM has been able to ramp up successfully.


Guidance is likely to be lowered... my guess to around 74k for FY2022. That means.. higher AISC.

Also, this sentence is not saying they are going to hit production targets, but... get closer towards them.


Then you have the engineering review....
Does not instill a lot of confidence.
Not the new MDs fault, but... he has to deal with the repercussions for such a lack of preparedness. The board should probably be removed to be honest. Such a terrible outcome, when it can and is being done professionally by other companies.



So where does that leave OBM....
highly dependent on a high gold price. I also wonder, if the company was being honest... what would the life of mine plan look like now.
With Riverina having so many issues (and likely grade not reconciling) it would not surprise me if it was closer to a 4 year mine life).
OBM is cheap. But... it's cheap for the wrong reasons. I find it easy to think I will buy a few back, but then.... I remember why I sold most of my shares before they poured first gold... because I am trying to not risk my capital. The upside for OBM is actually quite limited, because their AISC is rising, due to lower production, and... the extra dilution already faced, plus selling off an asset that clearly was worth more than $11m.

Humph....