(1) They need to get to at least a cash flow neutral position this Q otherwise there will be a need for more equity contribution. Over 50% of cash position is not available to them (bonding requirements) and thus free cash down to c. $1m.
(2) Grade reconciliation is a major. This is especially so if the overcall within the mine is a permanent change due to poor sampling initially. ORS can remediate the situation all they want but this adds costs to the process and there will be less oz in the deposit for a given volume.
(3) IMO Pearl is not a goer at these gold prices and that is why it hasn't been mined to-date. Happy to be corrected but the inferred nature of the resource means that any nuggety effect overcall here and heterogeneous distribution could mean ORS mine and mill a heap of dirt.
(4) I am concerned that we haven't seen any photos of drill cores from Burns yet with visible 'stuff'. IMO it means we haven't hit it out of the park on that one, and the cost of the drill programme will no doubt be coming into the next Q's cash burn.
Not overly happy on this one and questioning the prospects especially in the current POG environment.
Cheers
John
ORS Price at posting:
3.8¢ Sentiment: None Disclosure: Held
