Ann: Quarterly Activities Report, page-22

Syama’s sulphide had an AISC of $1637/Oz. This seems very high. Even if they increased recoveries to 85%, will it honestly bring this down to even $1200/Oz? This is a little worrying.

The oxide at Syama still outperforms and Mako too, but that sulphide really is a drain on the company at the moment. Hindsight tells me they should have poured their cash into Bibani and Ravenswood’s upgrade and left the sulphide in the ground, but that’s hindsight for you.

The realised gold price of $1407/Oz is also worrying to me. Last quarter the realised gold price was $1421. Last quarter the gold price was averaging around $1500/Oz. This quarter it was averaging around $1600/Oz. This quarter there was an additional 11,300~ Oz sold yet the realised price dropped.. I dare say this is because of the deferred December AUD hedging.

Looking back at the September Quarterly activities report, the company had 40,000 Oz hedged at A$1758 for December, 30,000 Oz hedged at A$1912 for March and 30,000 Oz hedged at A$1918 for June. Now June is showing 55,000 Oz at A$1844/Oz so this means 25,000 Oz of the December AUD hedging was deferred until June. Maybe this was announced somewhere but I clearly missed it.

Looking at the combined AUD and USD hedging in June 2020, the realised price will be 70,000 Oz at 1,238/Oz (55,000 Oz at A$1844 and 15,000 Oz at US$1522). So if the gold price averages US$1700 this quarter and Resolute sell 110,000 Oz, this will be a combined average realised gold price of US$1406 for the June quarter. The AUD hedging really screwed them over big time. The September quarter is when you will finally see a true uplift in the realised gold price which the share price may start to reflect once June is done and dusted.