Cheers Millibuster! I over-estimated the March quarter...

Cheers Millibuster!

I over-estimated the March quarter throughput, but everything else was positive. Losing the use of the L8 shaft for the first two weeks of January equated to 1/6th of a quarter so the 135.7kt milled was a reasonable result under the circumstances.

I expect the throughput to improve over this quarter, so it's just a case of more patience. The new haulage limit is now c. 180kt/qtr until the new service shaft comes on stream around September 2016.

All being well, the throughput for the June quarter may well be c. 170kt. The stope draw-down improvements will slowly continue to improve head grade towards the diluted reserve level of 7.2g/t - so perhaps something like 5.9g/t for this quarter is not unrealistic. And a repeat of the average mill recovery of 94% would imply a possible production of around 30-30.5koz for the quarter.

Then incremental improvements by quarter until the new service shaft finally frees up the L8 shaft for ore only and the mine haulage cap is lifted to c. 204kt/qtr. The feasible production would then appear to be (204kt x 7.2 x 94%)/31.1 = c. 44-44.5 koz/qtr at the reserve grade.

The realisable gold price is outside the control of MML management, so revenue and earnings are less clear. However, at full production the AISC should be around the US$800/oz region, so clearly in the lower decile for costs amongst their global peers.

But the signs are that a number of purely metal exchanges will be bi-passing the LBMA/COMEX paper hubs by the end of 2015 which may well finally reduce their significance on global price discovery for the PMs - and not before time!

Kind regards
CPDLC