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One of my only blue in sea of reds in my portfolio today, so added few and regards that as positive....
The pox hub has been a ten year plan , are we really reaping many benefits from it atm , it will take years to even cover the cost at this rate
I suppose the confusion could be be in the refractory ore process. As I understand it one POX hub was up and running and has been producing gold. The issue is is the out put lower than it has been and if so why. As I understood it the one working commissioned hub is already taking POGs and 3rd Party ore ?
Lawrence 13, I agree with you why our own production was down, I suppose it was because they did move from one mine to another.
As for the refectory ore, We do have loads of that, BUT, It needs processed first which is why we are building TWO more processing plants. Then we will be able to produce a lot more.
Third party refractory ore is different, Because thats the stuff we buy in, and Strukhov ( Your Mate ) has an abundance of. But it has been stated in the RNS that it is lower margin.
So, for all those who say Strukhov, is running the show, I would say the facts show otherwise. Because if he as running the show, we would not have a problem buying in third party concentrate.
My take on this, for what its worth, as they were not bothered too much bout low margin stuff, and preferred, to put the resources into getting the second processing plant up and running.
Another interesting fact, is the cash in hand. Only $7.5m, but only because we got some of Marches production paid just after April and after the cut off date.
I bet that will be recorded in the next update, and again make it look so much better than it actually is.
I'm still not clear on why production is down on the conventional gold?
As for refractory as I understood it we have loads of our own ore to process even on one hub yet in the update it was stated that after last years BOD coup there was no time to line up third party refractory ore.
I am glad that there are no more strange and upsetting things in the releases or results; The level of production is low but the market seems to have already fully taken this into account. The risk of having bad news now seems to be ruled out except perhaps for refinancing. I don't know exactly why, but I'm more confident.
Re- Edited version My old mac, really likes its auto correct. Which changes the rights things to wrong. !!!
Reality is, that even with these production levels, the profit for the quarter, will probably be very similar to first quarter last year, simply because, the majority of production las year was our own ore at a lower gold price, rather than what they class as (lower margin) bought in concentrate.
I still say, This update, is right out of Pavels book of tricks, where they ramp up production at the end of the year, beat forecasts, and tell us how good they are. Time will tell. And lets be honest the forecast isn't anything spectacular. I remember one fourth quarter where production was ramped up, and we did about half this full years forecast.
Well in the old days we had loads of excuses for poor production , especially in the winter months but these q1 figures are terrible tbf
Quite agree - the borrowing costs comment really stood out to me too.
That within 18mths of Pavel re-financing at over 8% we can get sub 4% when our production has declined just shows what lousy rates the old BoD were getting. Likewise the near complete removal of 3rd party concentrate processing tells me this really was a very marginal profit activity (atleast for us) - the one thing I would have liked to hear was that they intended to increase the use of zero cost collars, maybe to 35k oz per month so that the vast majority of our production would be protected from downside risk whilst allowing some upside exposure. Selectively buying these collars when the gold price is high and rising would mean we could lock in ever higher margins.
One thing that jumped out for me was the use of the word “hopefully”. That to me suggested a deliberate downplay, as who would let a trading update go out like that otherwise? “Hopefully” it means the “look how well we’ve turned things round” update isn’t too far down the track.
Reality is, that even with these production levels, the profit for the quarter, will probably be very similar to quarter ne last yea, as the majority of production was our own ore at a higher gold price, rather than what they class as (lower margin) bought in concentrate.
I still say this update, is right out of panels book of tricks, where they ramp up production at the end of the year, beat forecasts, and tell us how good they are. Time will tell.
Is that they are getting future borrowings at lower rates, That has to be good news and help us, with the maturity of the bonds rapidly coming towards us.