up or down today?, page-73

I am very dissapointed that the company has not articulated the cashflow implications in sufficient detail to address shareholder nervousness (including mine).

Number crunching the expecations for the June Quarter the best case scenario (gold > AUD$1,350 and no further payment to Pacer Corporation) would actually result in cashflow positive quarter. However, let's assume the following for the June Qtr:

1) Ave POG AUD$1,350.
2)Payment to Pacer-$15m
3) Mid range production guidance achieved
4) All in costs, Mount Monger 1,000/ounce, Murchison 1,500 per ounce.
5) Capex to complete Murchison- $5m

The outcome of the above is a circa $11m negative cashflow for the Quarter of which $20m is non-recurring capex. Given the loan facility available, the analyst reports that claim adequate funding are sound.

Move into FY 2014.

-Base case production is 250k ounces.
-Little capex is required for existing projects.
-A bear base margin of $300/ounce at a POG of $1,350
-A bull margin of $600/ounce @ a POG of $1,600

Going into 2013 I cannot see anything but positive cashflow and debt repayments if the POG holds up.

The above are not as bullish as we have been led to believe to date but something to hang onto in these dark share price days.