Reserves and Resources: Material increase in attributable group...

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swannmex

103 Posts.

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18/11/19

09:54

Post #: 41478243
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Originally posted by nordesmic: ↑

Since the pit wall failure in 2018 gold production from the super pit has been lower and costs higher. Recent figures may not be a good guide to what the mine is capable of delivering in the future.

In particular the wall failure affected the Morrison cutback which I think is what is underpinning the mine life. Morrison is still going ahead but at a reduced footprint.

Because the super pit is a non-core asset to both Newmont and Barrick, and buried in the back of quarterly reports, it is difficult to find any public information about the future mine plan.

At the beginning of 2018 before the wall failure Newmont was guiding to 390koz-440koz (for its 50% share) at costs of US$695-745/oz. If it can return to those numbers then A$1 Billion does not look expensive. It would be basically double the size of Saracen in output terms.

Key to the market reaction will be clarity on the wall issues and the mine plan.

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Reserves and Resources: Material increase in attributable group Reserves to 7.0Moz (up ~111%) and Resources to 15.0Moz (up ~63%)1,2, long track record of replenishment and growth

 Mine Life: Substantial uplift in Reserves and Resources underpin material extension in portfolio mine life

 Production: Pro forma FY20 production up ~68% to 605koz3,4,5

 AISC: Pro forma FY20 AISC of A$1,220/oz3,4,5 (up from A$1,050/oz), an increase of ~16% Financial: Highly accretive on various metrics including EPS, FCFPS and NAVPS

 Upside: Significant growth opportunities at all threeassets in Saracen’s portfoliohere is the dope

https://www.asx.com.au/asxpdf/20191118/pdf/44bnrs0dgr6b8q.pdf

Highly accretive acquisition across a broad range of metrics including earnings per share, cash flow per share, net asset value per share, EV/Resource and EV/Reserve

SAR Price at posting: $3.39 Sentiment: Buy Disclosure: Held
13 Upvote

0 Great analysis

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Reserves and Resources: Material increase in attributable group...

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