Citi broker report released yesterday - 1st paragraph says it all
"Given the high strip ratio of DML’s operations, C1 unit costs are highly sensitive to mining costs. In our view, actual mining costs will be materially higher than the US$1.35/t estimate proposed in BFS documents. We believe US$2-2.50/t is likely based on our assessment of cost inflation and benchmarking recent results from other African miners. Our analysis indicates that on this basis DML may lack economic ore inventory to underwrite the “Development Plan”, and as such uncertainty clouds the prospect of delivery against market expectations. Retain SELL rating and 50¢ target price".
I personally do not agree with cost expectations and feel that sell is overdone.
But what do I know!!
DML Price at posting:
$1.06 Sentiment: Buy Disclosure: Held
