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20.5¢ wiluna mining corporation limited.

*The following is a general statement not directed at any...

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satan1

395 Posts.

19

18/06/18

23:14

Post #: 33782784
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Originally posted by VYR ↑

Thanks Satan for sharing your thoughts.
U
I'm new to this company and having lost a lot of money on iron ore a few years back when I thought it had hit bottom at $90 I'm very open to learning as much as i can from others.

Re your comment

"AISC is low for a solitary quarter due to finally being down on full benches at obviously low strip portions of the main ore supply, bottom of the pit."

I'm interpreting that to mean that ASIC was low because the strip ratio is low.

Am I wrong in thinking that the accounting standards use the balance sheet to spread mining cost equitably across the life of mine based on anticipated gold production. When strip ratios are high I thought the higher than average cash cost of striping was capitalised and not charged to ASIC. Conversely when the strip ratio is low and cash costs are low ASIC is increased by taking pre-strip and deferred mining out of the balance sheet ?

Processing costs don't seem to be similarly spread so I'm thinking that the relatively steady cost per tonne to process the ore would deliver the lower cost per oz of gold when the higher grades are reached.

RE.

"The reason they struggled in the first place is they left the waste strip build up and key holed the pits leaving them way out of sync in the Dec quarter."

Am I right in thinking that this means they dumped the waste to close to the pit ?

Re.

"They also need to pay off their debt, Orion first so they have control of their exploration spend to do the above."

On the disclosure that we have to rely on, my thinking is that they should be cash flow positive to the tune of approx $5m a month after sustaining capital expenditure..

With Debt of $40m and cash and bullion of $30m at the 31st march and $36m likely from the options in January they should have a cash pile after repaying all the debt of circa $70m less the exploration spend and corporate costs by the end of January.

If the DFS for the expansion is done and the Cap EX stays in the PFS range of around $110m it should be very easy to get stage two off the ground.

Was it this forum or somewhere else that I got the impression that the plan for Stage Two might involve a measure of debt and a Placement to London Institutions associated with listing on the London Exchange ?

The fundamentals associated with this seem to indicate that it is a very good buy at 7.2c.
IF the next three quarterly reports confirm a continuation of the strong performance that was delivered in the first quarter then we could easily see a share price above 12c by January, which I guess is what the folks buying the options are punting on.

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*The following is a general statement not directed at any company in particular*

Every gold miner has a different view on what waste should be capitalised as pre-strip and what can't. Some capitalise waste alongside the extracted ore body from staging that others would tend to include as an operating cost.

Due to the lack of standards for reporting AISC and due to this vagueness around capitalising waste some creative quarterly results can result.

____

With reference to BLK I agree on face value the fundamentals look good at the market cap, but the discount is there due to the sentiment of the area. It's not a cheap place to mine nor process.

The next six months is key as really the first quarter showed us only they can make money once all the heavy lifting has been done.

It will be an enthralling watch.

BLK Price at posting: 6.9¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

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