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CaptainGrumpy

4,596 Posts.

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01/05/17

15:03

Post #: 24384828
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Originally posted by loki01 ↑

CG

Without a substantial improvement in the average grade from the pits they will remain a high cost operator due to the 10:1 waste strip ratio over the LOM (but is expected to reduce to the still high level of 8:1 over the next several quarters). For that reason I cannot see them making a substantial cash surplus to fund future exploration and mine development, which means if they ever try to proceed to mining the Wiluna underground sulphides that killed APEX, they will have to do a major dilutionary capital raising to finance the expansion. The market's recognition of that will likely suppress also the share price into the future, as will the fear of their chances of making it a success given current issues.

In addition to mining higher grade ore from the pits, other BLK's main hope is a much higher gold price which could happen simply by a falling AUD even if the USD POG does nothing for the next 12 months.

Perhaps there are still a few trades left here, like there is in other such problem goldies (eg BDR), but I decided over the weekend to take the cut first thing this morning. I was hoping it was not going to go this way.

BLK is now very high risk foor me with fairly limited upside. Perhaps if BLK goes to 20 cents I may buy some for a trade in mid year knowing that they have plenty of cash that could last them for most of this year even if they have to repay $15m of their debt.

I would not take too much notice of what Martis says about this company's mid to longer term prospects. As a trader he will quite rightly sell out at the first sign of trouble to conserve his capital, which I presume he has previously done here.

Good luck with your trading.

loki

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Excellent post thanks for sharing Loki. Will see how it responds over the next few days but might be a few shekels in a bounce from here. I'd be surprised if it surpassed your astute sale this morning however (in the short term).

BLK Price at posting: 31.0¢ Sentiment: None Disclosure: Not Held
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