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kojak78

1,537 Posts.

1134

03/02/18

00:19

Post #: 30787501
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Originally posted by observing ↑

$1000 AISC is to high definitely but it is a fair assessment from my view. In the original feasibility study for Karouni if I recall @correctly the AISC estimate presented to investors/shareholders and other interested parties was not greater than @ $650(being generous) anyway so on that basis I agree totally 100% and then some. Things change no doubt but my observation of reporting quarters with forecast estimate and consistently not meeting such has been around for a couple of years now during the Karouni phase although granted the new management structure, a wee bit of slack on the recent performance is warranted. Somewhat meeting forecast estimates has only come about in some shape or form in the last quarter or two. Karouni did start off ok.

It often appears a feature of modern corporate behaviour(behaviour in general) that positives are reported but negatives are for the most part deliberately or other forgotten and we can all surmise our own reasoning as we see fit if we are that way inclined. Let me provide a perspective/an example or two from the last report and I am sure you can see some others if you look hard enough. Disclaimer hehe - this is not an attempt to take away from the positives, that I am all for, but it is of no use not being highlighted as a behaviour that needs to change in order to gain credibility, confidence and motivation all round.

So the stripping ratio was mentioned as improving but the forecast target from the Annual Report 2017 was forecast as;
"the AISC is expected to decrease significantly through the mining of higher grade ore and with the strip ratio expected to decrease from approximately 8:1 at mid-year to approximately 4:1 by December 2017". If the target was met, or thereabout, the positive nature surely would have appeared in the quarterly, or maybe should have, maybe not the case. So give it to me baby, the other way around please. Tell me you estimate it to decrease in stripping ratio and then tell me it decreased to 7:1. Build on that? or stayed the same, other, whatever, keep it real, provide an explanation and a remedy etc whatever.

Another is the reference made to the 17,000 Au oz quarter production estimate in the London presentation which you can argue was met but the figures state 16,109 oz gold produced which is why I referred to the last couple of months as meeting estimates in some shape or form, as 1,075 oz gold is at the refinery so give them the benefit of the equation but still my point is those things don't go unnoticed. Reported is the positive perspective including the 18% increase in production or XX% decrease in AISC and that's all good but how about forecasting correctly and meeting those forecasts consistently? That is what a competent and capable management facility ought to do in my view. Over estimate at your peril as the words provided are consciously or other converted into less than reliable, or more likely inconsistent with reality. To keep it or make it positive maybe some work needs to be done with the estimation and feasibility criteria/roles within the company?

The gold price is higher than average realised last quarters 1,275, maybe to low, and appears the Troy boat continues to float due to the current uptrend which has been present over those last two quarters and I surely hope it continues to trend accordingly up to fuel the operation and as we can see the Troy share-price closely correlates to that POG overtime. Until the deal is done I see it to be fair to estimate at $1,275, like a base indicator, or be realistic, maybe seen as pessimistic as the POG is high but grade or mill/production issues are always a factor to be accounted for in some shape or form no doubt; Major generator overhaul $1m+, Cone crusher bearing replacement or other $, mill realignment $ etc and I understand they are all part of the process and likewise part of the accounting procedure.

Point taken Samboy about the differences in values, I'm with you, Go the Gold Price

Expand

AISC
You did notice the original resource model was wrong and they have much lower grade?

Strip Ratio
4.48 : 1 waste to ore ratio in December quarter. Am I missing something? Considering that includes some pure waste stripping are Hicks this is now a very good figure.

Production 16.1k vs 17k
They lost 4 days in November and December, 17k would have been met else. Pretty good. As I read all reports I did not notice the insufficient explanation for not reaching the target.

You should really base your estimates on A$2.6m profit per months at $1340. May I suggest instead of using $1275 as a conservative base using a $1600 gold price and a $1100 gold price scenario?

10 year yields of US treasuries are very high now. Bordering on the downward trend of 1980 to today. That means normally field should reverse soon and bond prices rise. US treasuries are a no-risk assets like gold. Traded in tandem over the past years. Declining yields and rising bond prices mean gold should rise too.

If the bond bull market sine 1980 dies here and yield break out... it will be an inflection point meaning higher inflation and much higher gold prices over the next several years.

Troy is highly leveraged to the gold price right now. Might be beneficial over the next several months (sentiments are way too positive, so maybe short term downside in gold prices). Eliminating the risk of lower gold prices would need a cr now. But that makes no sense as long as the share price is too low and as long as there are other ways to strengthen the balance sheet.

You should call the Chairman, he is very good in explaining the current situation without telling overly bullish things. Just an accurate picture of how things are running.

TRY Price at posting: 10.5¢ Sentiment: Buy Disclosure: Held
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