Cashflow

Other threads getting pretty messed up. Can we keep this one clean - just regarding cashflow and production?

My initial investment was based on the Dec Quarterly and forecast average FY17 production 65koz, after they had produced 9koz in ramp up this left 28koz per quarter for March and June. Latest quarterly forecasts 42koz after producing 9koz then 15koz so only expecting 18koz from June. Any objections here?

Ok so this quarter was 13koz short due to the once in a decade rain event... But it seems they now forecast the June quarter to also be 10koz short compared with what they said in Feb ... No more rain, it seems to be that there is a 10koz per quarter drop in production for June (and therefore also likely in March) due to something else, looks like grades and ore being less than forecast. They talk a bit about this in the mine details but not so clear. It seems to me that their AISC is still going to be very high next quarter if they are only expecting 18koz or 21koz highest range, but planning to continue the same capitalised development. In fact if you look at the quarterly financials their forecast cashflow confirms this.

More worrying when you look at the financial report. They forecast June quarter spending of $30M production and $1M Development and $6M exploration (all rounded). This quarter they spent $17M production and $10M development and $1M exploration. So next quarter the production and development costs actually increase from $27M to $31M. They received $24M from gold sales this quarter. Their production increases from 15koz to 18koz so at the same price they get $29M... and if gold rises to 1700 they about break even. Actually add in the other expenses and they are still forecast to bleed $9M with exploration and other costs.

This scenario is in itself not a total disaster although it will tend to hold the price down I imagine, a far cry from my investment at 50c and then top up at 40c. Given the dramatic change in outlook for this FY from producing 65koz at a healthy margin to 42koz at a loss. If they had not done the capital raising for their expansion plans when they did then big problems. The outlook for FY18 should be a lot better but then so was their outlook for FY17.

My biggest problem is their explanation for the production loss focuses on the rain event, but I just can not make any sense of this as previously discussed. Given the rain delayed their production schedule by only one month, the June quarter production should be forecast to be higher not lower than previous? It seems to me there is a more organic problem with the mining, particularly the underground, but I really can not tell from reading their reports. Does anyone see some clear evidence of this? If it is not something they are talking about clearly then it would seem to me that they do not have the issue under control. If you look back to my first posts after I bought into BLK, I was asking how honest and upfront management were with reporting, if they would present the facts to the shareholders before the wider market already figured it out and traded before the news. I really have not learned anything to form an even slightly affirmative view on managements reporting. I see very little positive in the quarterly to offset the issues above, and the market has treated BLK fairly in line of the numbers they present. I remain hold because there is potential still, although getting more risky!

Please do your own research and respond with some evidence don't just blow in with endless optimism. I really don't have time to read long threads of mindless arguments and accusations of ramping when anyone criticises.