@manny100 ... "In effect are saying it does not matter how material the increased resource and reserves are its just not profitable to mine? Is that right? "
No that's not right. What I'm saying is that if the quarterly mining cost was an accurate reflection of the ongoing mining cost for ore and waste, at $US5.60/tonne, then it is cooked..
Even at just a 29% increase in mining costs above the LOMP, the 29% being the same size increase as the actual processing costs increase over LOMP, then at current Gold prices, and assuming they get the 9,000 oz/mth, it's not cashflow positive in the next quarter.
Hopefully they included a lot of something else in that 'mining cost' category so the real cost is something less. It's one of the crucial numbers to know. Realistically though, why include a terrible looking number if it wasn't true?
The quarterly gives us hints.... "increased input prices such as fuel and explosives" .
So does the operational update... " Firefinch has experienced significant cost pressures in the last quarter. This has included material increases in diesel prices, the cost of explosives and other consumables."
It's quite easy to give a figure on the cost/tonne of material moved, yet they chose not to, they just gave a total mining cost in the quarterly.
BTW in terms of accuracy, FFX gave a figure of $US15,882,000 as the mining cost in the March quarterly issued on 27/4/22. In the latest quarterly released on 1/8/22 they gave the mining cost for the March quarter as $US19,380,000. They have changed the terminology from 'mining costs' to 'gross mining costs', all without any explanation.
Likewise for the sudden appearance of "Other Operating Adjustments", which only occur in the June quarterly, but have a number for the March quarter, also without any explanation.
Juggling and changing past expenditures all without any explanation I find very dubious and just another additional reason why I think suspension of mining and processing at Morila is the most likely outcome in the short term.
At least we should know where we stand within about 6 weeks, as that is when the half yearly financials are due. If we are not trading by then, with new funding, then yes we're cooked IMHO, no matter what the new resources/reserves are.
BTW @Red Baron the reserve grade in the LOMP is 1.4g/t and allowing for dilution and/or use of lower grade 'resources' outside the reserve are using 1.33g/t not 1.6g/t....
MA is a director at AW1.
@fooca ... "Costs back to Q1 (2021) levels in the short term, push through more of that higher grade feed"
Mining cost in Q1 21 was $US283,000. Even at the LOMP forecast mining cost of $US2.83/t it would only allow mining of 100,000 tonnes of high grade ore as feed, with no waste being removed at all. Not very realistic.
They need to mine the full 850,000 tonnes of ore to get to the 9,000 oz/mth. If they use a lot of stockpiled low grade ore, they wont make the 9,000 oz/mth target.
Even using 50% Viper ore at 0.92g/t and 50% Morila at 1.4g/t only gets them to 26,726 oz at last quarters recovery rate of 84.3%. Do they even have access to enough Morila ore of that grade without moving a lot of waste first?
FFX Price at posting:
20.0¢ Sentiment: None Disclosure: Held
(20min delay)