Morning guys ... day of reckoning;
It is a given that the Quarterly Report will be terrible "by-the-numbers". It is relatively easy to work out just how bad, on a cash flow basis, by plugging in the relatively fixed costs from Q1 (or ave. costs for last few Q's) and putting this against 21k oz of revenue at Q1 ave spot. Make further deductions for the dividend and the Debt repayment and you have an absolutely sickening cash outflow for the Q.
As I warned previously this may be some-what obscured by a blow out of trade creditors (as BDR have done before) to make the cash held number look better than it actually is for the HY report. We won't know this until the HY Financial Report is released.
The really important thing in the QR will be the forward narrative relating to:
(1) FY production and AISC guidance being maintained / adjusted
(2) Performance of MACA in hitting 80ktpd required earth movement / building stockpile at Mill
(3) Progress in overcoming permitting issue to mine Stage 3 Duckhead
(4) Whether BDR are now cash flow positive and comfortable in meeting all their upcoming obligations
(5) Tangible cost saving initiatives underway and ongoing
(6) Evidence that work is been undertaken / planned to ensure mining can continue uninterrupted next wet season
It was another tough night for miners on the NYSE / TSX so there will be further weakness today across the board.
Possibly grasping at straws but the BRL charts are doing what they should (weakening materially against the USD as the specter of an EM crisis is back front-and-center; due to rising USD leading to USD denominated debt defaults .... sound familiar to BDR's situation anyone !!):
View attachment 81617
And this in turn is assisting the BRL POG. It would appear that 3,500 which was previously resistance earlier in the year is now support - but Toastman may be able to add more detail:
View attachment 81618
Thus, assuming BDR can achieve it's operational targets for 2H and given that 90% of operational costs are BRL denominated then the company MAY survive this period.
Looking at the chart above it is very disappointing that BDR weren't able to sell lots of gold into the strong BRL POG earlier in the year.
[For all those apologists that are making excuses for BDR's Board and Management not hedging the USD loan; that is simply weak. There was plenty of evidence at the time, from very credible analysts, that the USD was strengthening against the AUD / BRL - even I saw it and actually advised BDR to protect themselves at 87.62c. The CFO and Board members are paid very high salaries / fees so this should have been simple risk management for a competent professional.]
Cheers
John
