Ann: Underground Development to Commence at Scotia, page-7

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wassa

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20/01/24

21:51

Post #: 71981502
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Originally posted by speculator101: ↑

Ok, so.... on the first read, I could not help but ponder just how.... PNR got itself into this mess.
Clearly the open cut contractor has been a disaster. Plus... the board has slowly... come to the realization that a small plant is... not very profitable using open pit ore (especially low grade from Green Lantern!!!)

Bringing forward Scotia U/G is a very very good outcome, though 4 months is not a big difference in terms of timing. The grade control for the main Scotia pit are showing the ore going into the mill now is high grade and profitable. Which... is why PNR are forecasting to producer around 20-24k per quarter in March/June in FY24 (the guidance in the announcement mentions 77k for FY24, so... they have produced just over 31k, leaving 45-6k over the second half). PNR should... sheesh I don't even like typing this, should... be generating free cash this quarter onwards.

The low capex for the Scotia U/G is a real boon, as otherwise PNR would likely have had to raise capital (I don't totally discount a small $20m raising to fund the capex and pay down some of the debt, but hopefully that is worst case) Hopefully the hiring of Tom means that things on the ground are finally going to get sorted out......

As you say @wassa - the extra U/G is going to be a major driver for production. 450k at 4.5g/t is upwards of 65k p.a. Or.... the base load of the entire plant, which... I think in hindsight should have been how Norseman should have been structured. Like OBM (and all 3 of WGX plants). U/G is the focus, with, potentially open pit supplementing to assist with the ore mix and reduce pressure on U/G tonnage.

As the open pit winds down, PNR will see much more serious cash flow generation, with no more open pit stripping costs for upwards of 2 years.

I continue.... to think PNR independent days are numbers. But.... not yet I guess.
Just a plethora of rich targets to drill out... but no capital to do it!
Unsurprisingly the share price is under pressure with POG lower, 2nd largest gold producer providing a crap quarterly and guidance and... PNR slowly... and painfully putting in the place the right plan for making Norseman great again.

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Hi Spec,

I just wonder the terms and costs of the Pantoro and Hampton split … given the well documented under performance and cost pressures on the industry one may consider both maybe happy to walk away.

Clearly the open pit changes ( much reduced stripping ratio ) should make the remaining life profitable less the additional mobilisation costs and integration of a new contractor. The downside is the reduced ore profile.

Interestingly PNR mentioned tier 1 contractors so maybe Byrnecut, MacMahons to take on the much bigger underground.

Unfortunately these type of changes can be longterm positive but no doubt are short term unsettling … time will tell I guess.

The qtrly might have all the answers lol.

PNR Price at posting: 4.4¢ Sentiment: None Disclosure: Held
4 Upvote

0 Great analysis

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