Hey Tim,
my main concern is the open pit grades.
At 1-1.1g/t, its simply not going to give the plant the ability to producer 100k p.a.
If the plant is running at 2.8mtpa, with a recovery of 93%, then I get around 92k p.a.
To date, the open pit grades continue to be below the mine plan (although that is over the whole plan).
The U/G continues to puzzle me. Even if the AISC is $2000, then its still profitable at the spot prices.
Clearly there is much more that is not explained in the quarterly as to why the U/G has been put on hold in Aug.
I do agree with you, we will likely see a further draw down in cash, perhaps $15-20m.
Everyone focus' on the debt repayment, I see it as being a non even, the cash has already been raised, whether the debt facility is $70m or $49m, the cash is there. I do think the current restrictions the loan has must be really driving LJ to get rid of it.
Although, why not just do a deal and get rid of it now?
Cash/bullion - $57.3 ((cash restricted....$15m? - $42.3))
Debt - $64.1m.
Debt payment of $25m - Debt $39.1
Cash - (minus expected above Sept costs $15-20m & debt payment$25m) - $12.3-17.3m (range)
Looking at these numbers.... I cannot help but think they will need to inject some more cash into the company.??
Happy to have the numbers torn apart....
Anyway, the poor quarter is behind us, which I cannot deny was disappointing, because they did not even meet guidance.
I can only see the share price drifting in the near term. Sure, they may have a few good hits, exploration wise, but...
I actually found the recent update quite underwhelming. The results were ok, but... it is early days.
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