Lets look at how profitable, or why its trading below or at cash on hand.
production guidance is 60-70K OZ at Simberi
Upgraded Cost guidance is now 3200 to 3400 / OZ.
What we know as actuals
40605 Ounces produced this fin year
Average realized price. 3047
AISC 3714
This represents a gross loss of $27,075,930
SBM says it will produce at lower end of guidance, so say for this example 60,000 ounces produced from simberi this financial year
If they have produced 40605 already, and they expect 60,000, then this quarter one would expect 19395 ounces. An improvement on last quarter but still not enough to avoid the disclosure of a cost guidance increase for the year to 3200-3400/ ounce. ( as noted by company in last report)
So for this exercise lets look at the business
What ASIC is required to meet the lower of production guidance (60,000 ounces) and lower end of the new ASIC guidance of 3200-3400, say 3200ASIC?Simberi needs to produce 19395 OZ this QTR to meet the lower end of production guidance(40605 actually produced, plus 19395 produced this qtr equals 60,000)
What ASIC does Simneri need to achieve on 19395 ounces this Qtr which would result in a full year production of 60,000 meeting the lower end of new lifted cost guidance of 3200-3400/ounce? (lowest new cost guidance 3200)Simberi would need to produce 19395 ounces this quarter at an ASIC of 2125.99/ounce for annual production guidance of 60,000 ounces at an ASIC of 3200 to be achieved.Currently Simberi has produced 40605 ounces, realized an average price per ounce of 3047 at an average AISC of 3713. This means the principal operation of SBM has generated ($27,042,930) in the first three Qtrs. of this financial year.
What Realized gold price does Simberi need to average this QTR, if it produced 19395 ounces at an AISC of $2125.99 JUST to recover the ($27042930) generated in the first none months of this financial year ?Simberi would need to achieve a realized gold price for the entire QTr of $3520AUDThis is why the cash holdings keep falling, as expected. opening cash beginning of the year 294M down to 218M end of QTr 3 ....(-25.8%)SBM talking extension development, that capital to achieve an SBM dream needs to come somewhere, expect the cash holdings to fall over time as the principal operation does not generate enough excess cashflow to fund expansion in the 10's of millions.
Only people making great money on this are the executives overlooking a poor operation which now has been flagged yet again needing development/ expansion.
The is no chance of a dividend as a result of operational cash generation anywhere to be seen. There is a reason it trades at cash value and below....SBM will lose and spend that capital imo, they have been doing it all year.
ref
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 | Column 7 |
|---|
| 1 | Ounces produced | aisc average | total cost | | realized gold price | | gross |
|---|
| 2 | 40605 | 3713 | $ 150,766,365 | actual | 3047 | $ 123,723,435 | -$27,042,930 |
|---|
| 3 | 19395 | 2125.993039 | $ 41,233,635 | forecast | 3520.317865 | $ 68,276,565 | $ 27,042,930 |
|---|
| 4 | 60000 | 3200 | $ 192,000,000 | guidance | | | $ - |
|---|
(20min delay)