WAF (ASX) Ann: Production Update June Quarter 2021

Originally posted by miningtragic: ↑

Delicate balance required here with sustaining the high grade ore reserves. Rather than rip into the high grade and deplete it quickly in 3Q and 4Q (both o/p and u/g), I think i’d want to deliver at top end of annual production forecast (280kozs), but keep some up my sleeve for 2022. I don’t see any value in creating the impression that this is as good as it gets in 2021, with subsequent large percentage production declines in future years. No one wants to peak early and then suffer lower production and maybe a lower gold price. We prefer growth don’t we? Surprise investors next year with a higher production /lower AISC guidance, and a shiny new dividend policy. That should keep the pot on the boil.

I’m familiar with the concept of the Chairman’s stockpile in one of my previous Board experiences. Nice to tuck into some super high grade that no one knows about, when you need a boost to your production ?

MiningTragic

Expand

Hey Mining.
To put it succinctly, WAF is in no way trying to give the impression that they can produce 260-280k p.a over the entire mine plan, but... like almost every mine ever built, they had planned to produce the most amount of ounces for the higher margins early on, to ensure they can pay off the debt, and enable shareholders to see the most cash generated possible.

This is the most up do date mine plan.

The first 3 years are all within 10-15% of each other, though CY2021 is likely to be the highest of the 3.
As @nordesmic pointed out, the high grade open pit M5 is a sweetener, that is, unique within the mine plan so far. Hence the kicker for CY2021. Though interestingly, CY2023 is likely to see a similar or even higher amount of ounces from the M1 south U/G. I think I understand your statement regarding a hidden stash, but... I think WAF management are simply going to quote Nord, 'cherry pick' the higher grade ore from the U/G and open pits, stockpile the lower grade where possible, to ensure maximum profitability.

I just had a another read through of the March 2021 release - WAF new mine plan

Damn is it a good read.

For those interested, this is what we still have to come. Since we just got the production report and confirmation that the U/G is continuing to ramp up, next is the quarterly, and the exploration results.

This table is... dare I say it... beautiful? (though of course, its not all reserves, yet.....)

When you throw M1 UG and the deeps together, you are looking at a total resource of 1.58m ounces at 12.9g.t, yet, still trade with a market cap barely above BGL, with a plant and cash flow... well, I think we both agree, WAF is worthy of the markets attention.

Nord - just for confirmation regarding the open pits. WAF is indeed not focused wholly on the M1 South open pit.

So it looks like WAF will likely feed in the higher open pit ore more gradually, as explained here (even though the M1 South will finish early 2022, I believe it would still be going into the plant through to the end of the June Q. So, CY2022 will see continued benefits.

Not sure if anyone noted this earlier, but... WAF has 1mt stockpiled (39k ounces) as of Dec 30! For a new plant/project, to achieve this in less than 12 months, is incredible. That is over 4 months of production.

Anyway, glad to see the share price showing some liveliness. I imagine that since WAF has traded in a bit of band for a while, profits will again be taken, but.. will we finally see the share price break free and the $1.00 become a thing of the past?