Mt Morgans mill water shortage, page-2

Hard to believe that basically 3 years ago the company announced a new ceo-

old ceo was helping with the transition ( but seemed to be selling as it turns out ) as the board confirmed all on track to reach annual production targets of 150 k plus ounces in same announcement

by jan 31 at 2020 with no quarterly report the new ceo placed the company into a trading halt as shares were about 1.40 ish and the market was expecting solid production to meet annual guidance it had confirmed about six weeks prior as it announced a the new ceo

but nooooooo

the resource and reserve statement was found to be inaccurate - based in part in old jorc code and not industry best practice and it decimated and in left the company in desperate need of capital

shares on issue were about 250 m and would skyrocket as fresh equity was raised for a new more efficient low cost 3 year production plan carefully created

ohh the three year plan

the rampers entered and promoted the new CEOs track record of brilliance and said the plan would see the resources and reserves reappear after money raised for drilling continued and the share price would go back to pre raise days- less production but more profitable - and debt was being negotiated and existing hedges resculpt- so exciting - get the shares whilst they are cheap cheap

the plan produced one good quarter which was then extrapolated out as the company being back on track, but this was flawed as many based it on a cashflow statement produced each qtr and ignored the rising costs

by late that year and into the beginning of the great great three year plan it changed but changes were ignored as Dcn made an all
Script takeover bid for ntm which had a small resource, no reserve and 3 million in cash- a company that needed allot more resources- needed a reserve and had no plant to process anything- ntm holders struck a great deal, sidestepping huge dilution - getting paid a massive premium- Dcn holders expected the resource to be included in group production lifting its profitability even higher than expected but learnt a hard lesson about resource and reserve - remember the mine the hub excitement —

in the end -

the three year plan required multiple capital raising as even the totally new production plan failed to ever materialize- there was zero ore brought online and processed from the new ntm tenements and many discovered finally the difference between a resource and a reserve

all of this resulted in significant increase to shares on issue- higher costs due to low ore grades saw costs per ounce produced explode even higher than when the new ceo came on board

everyone believed it was simply Covid and inflationary costs which were not the principal cause Just an excuse imo- costs had been going higher per ounce since the new plan was created

the debt and hedges were rescheduled and rescalped at great cost a few times

with poor production and low grades suddenly even more capital was required- the underground mining first claimed as uneconomic was suddenly going to come back online and there was much excitement about old ntm assets

none of this eventuated and the costs were simply too high to cover the low grade ore which had never changed


with well well north of one billion shares on issue - a failed plan , debt finally paid off after hundreds of millions of capital raised- the new plan clearly isn’t working out - (stop open cut which was at first promoted as the way to go- reopen underground that was to be closed as uneconomic ) but don’t worry a final plan -

process some stockpiles - cease mining and more drilling to become essentially an explorer

yeah that didn’t last long

ceo resigns- despite resigning , the board of which he was the sole executive approves a full payout using its descretion - he makes well north of one million dollars and the company prints almost 200,000,000 in losses for fy 2022

then- the geologist gets appointed at 500 k cash ( from memory) and before you know it Dcn receives an all script takeover from a party with next to no reserve or plant

and here it is- almost the finish- mega money raised and written off and a new player in almost full control

previous management with their performance rights cashed out - sign on bonuses and high cash salaries are gone- but many investors remain holding losses and the financiers have been paid in full

of course there was a great final pump as many promoted alternative bids- how it was undervalued - how someone else would love a plant a bag of low grade ore scattered all around- but alas the hedge funds have made a fortune sucking even more in as they accumulate for the aquirer

moral Of the story

don’t believe any plan based on what someone has achieved somewhere else at a different time - be careful of moving based on quarterly cashflow statements
- forget next quarter promises- grades are important and consistant profitable production
-if major plans change suddenly within the first year assess- major holders notices don’t mean jack ( it doesn’t hurt if they lose other people Money that much) and remember the names of the managment as there seems to be zero consequences for stating on track for production and then admitting everything is way way off Jist six weeks later - there is no consequences for anyone providing expert plans and forecasts and missing every single forecast they produce by a mile and they still getting paid

sad state off affairs ,so much money raised based on fancy presentations which ultimately resulted in losses time and time again

shocking how much the market keeps handing over vast sums of capital time and time again

non cash write-downs are very serious - non cash As promoted jistmeans the capital was spent in a different time period -

time will tell what the new owners do with the plant and how much capital is required to build and maintain a constant stream of profitable production

good luck -

3 years of Dcn hell for investors seems to now be coming to a close