Member Info for Cornishknocker

Sorry, just to be clear my comparison with mining costs were with Q3 2019, not Q4.

The costs come in three main elements: -

Mining Costs - I assume the contractor is paid on Bank Cubic Metres moved, last quarter saw a larger volume of ore moved, but the overall material tonnage moved stayed much the same (Just over 1 Million tonnes). That means although the ore grade is lower, the stripping ratio (Ore:Waste Ratio) is also lower - which is typical as an open pit gets deeper, as you are following the ore body into a cone. So the mining costs for the quarter should be similar.
Processing costs: - The plant is still working at capacity, so the processing costs are going to be broadly the same.
Administrative costs - these are fixed, so will be the same.

I've excluded exploration as this is more closely related to capital expenditure.

So in short the actual costs for the quarter should be approximately the same as Q3 2019, which were $540/oz producing 6933 oz (Total cost $3.75Million)

Q1 saw 7318 oz of gold valued at $11.58 Million, so assuming the costs are similar ($3.75 Million) the Q1 cost should be in the region of 3.75million/7318 ($510- 520$/oz) - which is pretty respectable

The full Q1 operational update is due next week, although I'm not expecting anything we don't already know there.

The big difference is the movement from a resource that was indicated and inferred to one that is principally measured and indicated, which is the aim of an infill drilling campaign.

That's another good one, effectively another 10 months feed for the plant - however without increasing the mill throughput, there is little point in mining this at present as it would in effect increase the production cost (due to cost of transport) without increasing revenue. This is now the news to increase the capacity by between 50-100%.

Spot on Joe, living in Cornwall with one of the lowest infection rates in the country, I was just reading an article on how we can expect one of the busiest summers on record - that is frankly absurd.

On why not just push deeper with the open pit (as a mining engineers take), by going deeper, you are increasing the steepness of the pit walls - unless you increase the pit size, which means a lot more stripping and regrading, which will eventually leading to a pit wall failure.

Exactly moneymaker , hit the high grade first while your fixed costs are highest (due to debt repayments), which reduces your variable costs (mining and milling).

The one word of caution with regards to the possibility of adding a second mill. Milling is the most electric intensive part of the process, is the energy supply available to increase capacity?

I make the stockpile at the end of the quarter as 158,000 tonnes, with a value of nearly $36 Million in contained metal, with a 92% recovery, that would yield a revenue of around $33.5 million.

On last quarters average prices the revenue for the quarter will be $9.25 Million.

The first thing to do is increase the reserve size and then increase the mill capacity in my opinion. The throughput looks like a 50/50 blend of mined ore and stockpiled ore.

I reckon that's between 9 and 9.5 million dollars revenue for the quarter and now free of debt.

Theres approx $28 million sitting in the stockpile, the limiting factor is the mill throughput the aim should be to blend the higher grade ore with the newer lower grade ore, which will still see the mill head grade diminish and consequently the revenue, unless the company increases mill throughput which will require cap expenditure, but theres no point in doing that unless the mining rate is sustainable, which will depend on exploration. But in short I believe production will be higher than the guidance this year. Under promise over deliver....

We should have the quarterly preliminary results by the end of next week, it should be another good performance, with the gold price for the quarter, being 6.77% higher, although the silver price was down slightly by 2.53% (Silver took a real bashing in the last month!). The increase in price, should help compensate for the falling head grade, with regards to the head grade it needs to be remembered that at the beginning of Q1 there was 120,000 tonnes grading in excess of 4% sitting in the stockpile, which is available for blending.

Everyone should have expected a drop in the guidance, the feasibility study showed high grade areas being targeted first, this allowed the rapid debt repayments. We've known the plant is operating at capacity with falling grades, which means production can only fall without expanding the plant. If the reserves increase I think this needs to happen.

I think a top up is order here, gold prices going up, mining costs coming down with the oil price and the price of this is getting cheaper!

On last quarter we saw strong gold prices and good production levels with diminishing grades. I think this quarter is likely to be the highest revenue we are likely to see from Kiziltepe without investment in Tasvan. So on that basis we are likely to see see free cash generated drop from about $8 million. Of that we will get half, so a max of 16 million a year, less royalties . The mine life of kiziltepe will diminish with time, so for us to hang on without the JV we would need to hold onto current profitability for nearly 4 years with record gold prices which will drop at some point. I think banking the investment may be the sensible decision

There aren't many gold companies around with an aisc of $1200 below there sales price.

It's a bit of a mugs game trying to second guess why someone sold, it's entirely possible that they sold for a 20% profit in 3 months and just wanted to cash their chips in, or perhaps paying off a mortgage or buying a house or wanted a sports car or has been diagnosed with a terminal illness- are any of those scenarios really any less likely then "they have inside knowledge"?

Well at the end of the first month of the quarter the average gold price is up 5.1% on the last quarter - it Carrie's on like this and we'll be looking at $13 million revenue for Q1. This quarter will see red rabbit debt free and a decent profit recorded - of course the jv is the unknown