Yes, the recent CR did certainly came as a surprise, but just before the consolidation, I was a bit concerned about their Cashflow. Operationally they have plenty - it is the loan repayment schedule that is the worry. Tey spent too much exploring, but I can't blame them too much because they spent on the assumption that spot gold would hold up earlier this year.
I assume their lenders forced their hands. They wanted more security due to the drop in gold price.
The problem is the EBITDa they report is not for the company. It is for the mine site. This just means it is sales revenue - cash cost for production. I don't like relying on non-financial reports too much. Gives good guidance, but always open to manipulation and there is no set standard. If you look at the half yearly, the EBITDA is 16m if you don't include the gains from the hedgebook.
Yes, certainly clarify it with management. Would be interested in what you find. The other concern I have is (from memory, the reserves were calculated using gold price of aud1500. It is now less than aud1400. I wonder how this affects their reserves calculation.
MOY Price at posting:
29.0¢ Sentiment: Buy Disclosure: Held
