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21/07/16
14:19
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Originally posted by Romann
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Clearing the debt is one of the risk factors - 6m raise is gonna get rid of a good chunk of it in the short term and recent production figures are pretty impressive for a little minnow, enough to bank on in my opinion. Unless things go particularly pear shaped they are well on track to clear the debt this year.
In the interim - ML on pearce north will get granted and they can work that resource with their owned existing infra - and then there is Sorby..
There is a chance the company could fail if creditor payments aren't met but on the balance of probabilities I believe they would work out something with their creditors if the production figures are maintained in the near term - I reckon you are right, it might come back to issue levels in the immediate term but I still think risk vs reward this is undervalued.
What other miner with a MC under 10m is boasting this sort of cashflow and debt smashing profit?
Highlights from last qrtly:
Record Gold and Silver Production at Mineral Hill $4.9M Profit Turnaround
9,209oz of Gold and 111,826oz of Silver produced for the quarter o Gold production – 79% increase from last quarter o Silver production – 226% increase from last quarter
Currently high grade sulphide ore from the Pearse open pit is being processed through the flotation and CIL circuits with average total gold and silver recoveries achieving 71.2% and 65.8% respectively
Pearse open pit produced and delivered over 45,000 tonnes of ore to the plant and stockpiles. The open pit ore has averaged 6.64 g/t Au and 71.81 g/t Ag, which is above expectations
Commissioning of the second concentrate filter and CIL carbon regeneration kiln were both completed during the quarter, with increased plant unit throughputs realised in March 2016
Unit cost of production for the quarter is $1,097/oz Au (including Ag credits). This is a decrease of 22% from the December quarter (reported at $1,399/oz). This is higher than planned as it includes certain non-recurring plant commissioning costs
The Company’s EBITDA for the quarter was $2.8M. Net profit for the Company improved $4.9M with profit for the quarter of $0.8M compared to a loss in the previous quarter (December 2015) of $4.1M
Share issue to creditors of $2.9M with a further decrease in trade creditors of $0.7M for a total decrease of $3.6M, current balance is $13.9M down from $17.5M at the end of December
The cash balance is managed so as to reduce creditors as much as possible. At the end of the quarter it was $0.84M, up from $0.02M at the end of December
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The A lode looks particularly profitable to me. I don't know why there is not more emphasis on it. Maybe it requires more drilling and development before they can produce from it effeciently. Perhaps that is why the emphasis on getting Pearse North into production - to allow more time toget the A lode up and running.