Yes we now move into disclosure integrity issues IMO which is...

Yes we now move into disclosure integrity issues IMO which is concerning.

On the 13 March 2019 they said this to shareholders in the half yearly reoprt.

"Gold production reached Feasibility Study levels allowing the Group to declare Commercial Production on 1 January 2019.

Other than the matter noted above, there has not arisen in the interval between the end of the reporting period and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years."

"To affect substantially the operations of the group". Well I suppose it is in the eye of the beholder as to what "affect substantially" means. The production short fall according to today's announcement peaked in Febraury so they obviously knew of the problem when they made their Febrauary presenation and when they printed their half year report. I am not impressed by this. Would not the fact that gold production fell to levels below feasibilty and guidance post the end of the half year be something that shareholders should have been told about in the half year report rather than let them believe the mine was still operating to Feasibilty levels?

In one of my posts when we were all speculating I mention the stope to development ratios that were discussed in the company's Dec quarterly report, see quote below.

"Average daily production rates of 2,100 tonnes per day (tpd) were achieved during the quarter with stoping production comprising 58% of all ore tonnes mined and ore development contributing 42%, slightly less than the Feasibility Study design levels of two-thirds stoping and one-third development."

The development to stope ratio was only slightly less than than the feasibilty design in Dec, ie 42/58=0.72 vs 33.3/66.6= 0.5 and we have since been told that Westralia UG is operating to feasibilty levels now. Unless they have lied we can take that as fact, so there shouldn't be a back log of development or waste ore to be mined. Maybe you are talking about what has happened between Dec and now to bring the mine in line with feasibilty."

https://hotcopper.com.au/threads/ann-trading-halt.4682027/page-46?post_id=37837909#.XJgXIxo_WhA

So in the 25 Feb 2019 presenatation they said

"Westralia now performing in line with Feasibility Study levels"

Clearly at some stage very shortly before the above above statemment was made in the 25/2 presentation the mine wasn't operating to feasibilty levels as they said today that "the production shortfall peaked in February and was addressed in March".

They say the production short fall was addressed in March so how can the above statement about the mine "now performing in line with Feasibilty Study levels" be true as at 25 Feb 2019?

The optimist in me would give this explanation (although it should not be up to me to be giving any explanations it should be the company providing the clarity). As more stope faces were opening up between Dec and Feb to close up the development to stope ratio gap equipment to the mine couldn't be supplied at a fast enough rate to service the new stopes. That is basically the reason given for the short fall in production.

The announcement today said

"As at the end of February the net unplanned mining dilution of the first 115 stopes completed from the Westralia underground was less than 1%. Ore loss and dilution from the Jupiter open pit through to the end of February was less than the corresponding ore loss and dilution levels used in the Feasibility Study."

The question is does this mine represent too big a strain on contract miners to run at the ore production rates specified by the feasibilty? Maybe someone with more undergound mining experience might care to comment. In the 25/2 presenation the company said there were "good stoping conditions at Beresford South" but in this announcement they are taking about getting more tele-remote loaders to go with the three already in operation.
Is the need for the tele-remote loaders a consequence of the small stope widths or dangerous stope conditions or are these loaders standard now a days in these type of mines?

My trust in the accuracy of this management's disclosures is now very low so as a result I've changed my sentiment from buy to hold and will start trying to read between the lines until they prove themselves by delivering on guidance. By the way based on past disclosure reading between the lines would not have done anyone any good as there was nothing to see there IMO.

To put it into perspective however NST's Dec AISC for its Kalgoorlie operations of $1,406/oz falls into DCN's maiden March AISC guidance of $1,400 to $1,500. I know that is no consilation for shareholders but it does put things into perspective. If they can achieve the June guidance and maintian it this company is a buy but at this stage it's a hold or reduce weight in my opinion. The play with words in the Feb presenation and half year report was just unacceptable IMO. Esh