Hmmm, there is some good and bad in these results:GOOD:Record...

Hmmm, there is some good and bad in these results:

GOOD:

Record quarterly production
Better grades
~3M USD paid off the debt
Longer mining of gold anticipated (at least one more quarter)

BAD:

There is still A$14.9M outstanding in debt.

Now alone is not too much of a problem until the numbers are looked at.

Jan 1 2021 money in the bank =7M
Mar 31 money in the bank = 1.5M

A big factor in these numbers was that they paid down a lot of debt during the quarter. However, if they have another two quarters like the previous one, they will still have about 8MAUD outstanding in debt. TPC are being paid back at 3.5MAUD a quarter and assuming they keep paying it back at A3.5M a quarter, this means $6MAUD still outstanding to them when the gold runs out (end of Q3). The IPO said gold was to pay off everyone - but that doesn't look likely now.

Even if they bump production to 6koZ a quarter, this only improves the situation by 1.5M to the bottom line a quarter; still short.

HOWEVER, this alone isn't a killer blow. There is upside potential for more tonnage to come out of Boppy (looks like that is certain), or better milling / grades of existing orebodies.

However, they will need a few things sorted out before end of Q3. First, lets assume they decide to chase the extra gold discovered at Boppy. It's going to require a massive cutback, or stoping. This will cost CAPEX that hasn't been forecast, and isn't in the budget. On the off chance they get better grades/recovery, they will need to increase oz/quarter by at least a third (assuming A2300/oz). Recovery alone won't manage that, so it will have to go to a 4g/t head grade assuming current recoveries are maintained. I'm concerned.

So if they decide to switch to silver instead, I hope they have bought extra carbon and refurbished the elution circuit. They chose to use a Gecko unit for gold - is the old circuit serviceable? That will be a cost to replace if not (and it will be needed for the bigger tonnages / volumes of carbon required). Where will this money come from?

I think the company is doing all it can to finally make the Boppy-mine/Wonawinta-processing plant combination a winner but have to say I find it totally unlikely now. This will be going the same way as Black Oak. 10 points of out of 10 for trying however.

OR, of course, they could do what other miners do and just keep doing capital raises. Nearby HLX is a good example.

DYOR