1. Possible gold production I started this to look at what we...

1. Possible gold production

I started this to look at what we should look for in the following quarters.  This assumes that some financing deal goes ahead to stop VA, and that the last quarterly update is legitimate and not hiding anything in the finances (for example a large increase in current debtors, or decrease in working capital.  Oh and no significant weather events! Lots of assumptions I know, but since we do not know details about about the refinancing or the capital raising it seems the most useful to discus.

This looks at best case scenarios, or possibilities, until we know more, not an expectation of what will happen.  If we can not make a best case scenario look favourable then no amount of refinancing is going to make this a buy.

First look at production There are two separate figures to consider, one is the mining rate, producing their HG ore for stockpiles, the second is the gold produced from the mill using stockpiles (not necessarily the ore off the truck from the mine - hence the difference between mined and produced gold figures)

From the latest quarterly in Dec Mill figures were 144koz feed at 1.3g/t, 91% recovery for 5.5koz gold.
From the mines:
December, 137kt of high grade ore @ 1.6g/t mined from M4 and Galaxy, with the 8,038oz of gold
Golden Age reserves of 60kt @ 6.4g/t for 12,000oz (30 June 2017), planned to be mined by June 2018.
So at best they are just producing enough HG ore to feed the mill.  I think the HG ore may be harder so they process a bit less at a bit lower recoveries.  They have some stockpiled HG ore now.
stockpiles which amounted to 51kt @ 1.6g/t as at 31 December 2017.

From the Dec mill production we have 5.5koz per month or 66koz a year.  However this is at 1.3g/t, but the stockpiles and mine figures for only the HG ore is 1.6h/t so production 1.6/1.3 *66 = 81koz. This ignores the UG also.
Let us compare this with their record gold production week they gave
weekly gold production of 1,685oz being achieved in the last week of December,
(average mill feed grade of 1.5g/t Au) together with the building of high grade stockpiles.
Multiply by 52 weeks gives  88koz per year or 22koz per quarter.

I don't know if you can improve on this, or even maintain Dec production rates with no interruptions or further problems which is a big ask.  There may need to be a mix of LG ore to optimise production over mine life due to it's effect on recovery and throughput hardness etc.  I do not know any of the technical details and it is a very technical process to optimise.


From the previous (Sept Quarter)
Galaxy will be mined by the end of Jun’18 with expected high grade ore of 370,000t@ 1.7g/t  
at a total stripping ratio of 3 to 1 which includes low grade ore to be stockpiled.
Mining at  M4 by the end of Jun’18 is expected to deliver 816,000t @ 1.6g/t over the next 9 months
at a 5 to 1 stripping ratio.
FY18 throughput is targeted at 1.73Mt.

Plan was for 1935kg of gold or 62koz.  They have mined 8koz this quarter so say 25 koz per quarter possible according to this plan.  So given they already have stockpiles, if the plan works out they can supply the mill at maximum capacity with 1.6g/t  This is just from the open pit, they also have 12koz gold to come from underground at grades of 6.4g/t.  Now lets go back and look at the best Mill performance week in Dec as above.
weekly gold production of 1,685oz  mill feed grade of 1.5g/t
Increase to t 1.6g/t this would be 1.6/1.5 *1685*52 = 93koz a year or 23koz per quarter.  It would go higher with the underground so 20-25koz production is what they say they can achieve.

Here we have looked at the last two quarterlies comparing mining and milling figures to see a consistent picture between what they say they can do and what looks possible from their best figures.
What they have actually achieved to date is:
22koz per quarter for 1 week and
16koz per quarter for 3 quarters

Lets look at costs in a new post.