I thought about making a new thread however I think you have done it for me.
here’s my guesstimation on our “update to operational performance and production guidance at the Morila Gold Project”
Q1
Q1 fell within guidance, however held a significant step with much of the draw shifting to satellite pits namely viper and adder.
importantly here, gold output via viper/adder appears to be steady for Q2, with repatriation/stockpiles the main changer for superpit ore (and to a far lesser state n’tolia. I believe this to be significant as there is nothing to suggest a decrease in output via these pits. As they make up over half our planned output, I’m comfortable that target will be hit.
according to the same report, superpit and n’tolia were ahead of schedule, particularly n’tolia trouted as 6 weeks ahead. It is my belief n’tolia will produce as per above guidance.
leaves us to the superpit itself. Looking back at media releases, there has been no clear indication of any issues with either superpit / satellite or plant released issues. It is my belief that the plant is working as expected and is not the cause of issues.
so where does this leave us? Comes down to either lower than expected input or grade. Personally I am leaning towards input as the key driver for lower gold output this quarter however am willing to except to a much lesser secondary issue, they are currently going through a slightly lower than expected grade(that’s speculating the announcement will be negative)
if we look at the guidance forecast, I believe they will slip slightly with this quarter moving down to Q1 13-15koz Q3 25-30k oz Q4 30-35k oz
2022 totals ranging 68-90koz more importantly, I believe little to no change on guidance 2023.
I believe in relation to production, we will see little to no long term issue.
however.
I believe with increases in cost, our current ASIC would be over $2000oz (asic to drop significantly 2023 quickly becoming sub $1k). Current Higher than expected ASIC combined with lower than expected output I believe would see the key issue for the company… not really the production or operational performance. I understand they are connected… but believe this works towards this point, our available cash will become too thin before we move cash flow positive… by my guess h1 2023.
Leads us to the question, debt or raise. There are reasons for either. I’d say the safer bet is raise. I believe they would be adding additional unnecessary stress to the company by adding debt related pressures as the company is yet to move cash flow positive and does run a risk of a slower than expected ramp up.
There is a lot to like about Morila, if the currently LOM plan was the best we could manage, we still would see handsome reward longer term. Current incoming LOM2 upgrades plus exploration, this still has serious speculative upside (I still believe Willy the whale hides under Samacline)
leaves us to our directors. I thank Mike for the work he has done. I believe people lie to themselves to directly blame Mike for issues we have faced. the most telling part will be as this announcement drops and we compare results to very recent media releases. We were told things were progressing as expected with a healthy plant. If there is a downgrade to our guidance as I listed above, I personally see it as a fairly minor blip long term. Chris Evans role was cut short for sensible reasons, and I feel it’s probably the case again here.
we don’t know the circumstance yet of the other two. Currently it does not concern me. I think cash will prove to be the biggest issue and it makes sense to not have a lab excessive amount of board members while bleeding cash. I feel it’s critical for all other directors to stay onboard Atleast until we have a clear update on what’s going on.
in short, it’s hard to think we won’t see a decline on reopen however I think it will be short lived, the price is already basement. Eyes will move quickly towards the quarterly and what our cash levels actually look like. I did find Mike way he expects LOM 2 to be released H2 2022… again my opinion this will be the catalyst and the driving time to announce a raise to get us there.
7 rigs at Morila… if there is to something substantial to add, such heavy drilling seems unwarranted.
not rereading, apologies if this is poorly written/ repetitive/ doesn’t make sense. I still believe this company can be a billion dollar company 2024 even without M&A… around the same time LLL will be at eye watering levels.
(20min delay)