If anyone wants to know why DCN is in the dog house, it may be best to set aside conjectural issues such as gold price and AUD level and look at what has actually happened.
last fiscal year, DCN mined 3.9 million tonnes at a grade averaged at 1.2 grams/tonne. To reach that ore, the company also mined 23 million tonnes of waste.
the operation is actually making a bit of dough but these key metrics hardly suggest we’re sitting on a gold mine. I reckon few companies in the world can make much money with those metrics.
DCN is eking out an existence mining for now, but busy as all get out with exploration and development, essentially investing heavily in future production.
but until there is a sustained lift in the grade of gold ore mined, we’re not going anywhere.
an updated life of mine plan was scheduled in mid July to be issued in the current calendar quarter, it can’t come soon enough.
i became a holder of a typically modest parcel during what can now be seen as a dead cat bounce late last year. I misread the SP move then and are now well out of the money.
patience will be required. Quite a long way down the track, this will yield golden fruit.
DCN Price at posting:
25.5¢ Sentiment: Hold Disclosure: Held
