Ann: Quarterly Report to 31 December 2014, page-18

Apologies Spec
I stuffed up when posting last night and it could look like I am trying to make you look responsible for things I have said. Reposting here:

“The average production for the past four weeks has been approximately 870 oz Au equivalent.”
But because the week of 22nd Jan is atypical (due to the Isa mill maintenance) this average figure is absolutely useless (unless they are expecting to do Isa Mill maintenance every 4 weeks). It’s much more useful to skip that week and average the other three to get a 936 oz/wk average. Unfortunately though, looking at the throughput chart this has been achieved on throughput which is higher than the 15,000 target and is therefore somewhat elevated. Maybe somewhere around 925 might be a more realistic production target for non-maintenance weeks.

“The project has demonstrated its capacity to produce around 950oz Au equivalent per week with the current plant configuration, at the targeted feed rate and head grade …..”
Well, er yes, but only on the odd occasion. If you eliminate the maintenance weeks of 9 Oct, 20 Nov, 1 Jan and 22 Jan (Isa mill) along with the bodgee figure of 1105 on 2 Oct you are left with 13 weeks on the chart of which only 3 achieve 950 oz or better. The 950 oz capacity has been demonstrated but certainly not what you would call in a reliable or consistent manner and 2 of those 3 weeks were on throughput above 16,000 while the new target is only 15,000.

For the March Qtr I am expecting 3 planned maintenance weeks with production of about 700 oz. Combine this with 10 weeks averaging say 925 then divide by 13 to get a weekly average of 873. Their production guidance for March Qtr shows gold 11,600 and silver 79,400 which I calculate is 12,734 GE or 979 oz per week GE. This is quite a jump on my calculated figure of 873, approximately a 12% increase. The 979 oz I have calculated from their guidance figures is only a couple of cat’s whiskers short of their projected figure of 1,000 oz per week in Q2 after alterations to the baffles. It does seem more than a little over optimistic to me.

The production for Dec Qtr of gold 9,500 and silver 80,000 calculates out at disappointing average of 818 oz/week. If you deduct about 185 off the 1,105 for the first week (to make it realistic) it is even worse at 804. I can’t believe that they have had another machinery malfunction and it is probably good for the SP that they kept mum about it. Anyway, they have dangled the carrot again and there are a number of positives that could occur in the next 3 months. While I have little confidence that they can average 979 oz/wk I am confident they can improve on this Dec Qtr which I see as a paltry 804 oz/wk.