RSG (ASX) Ann: Production Update December Quarter

Originally posted by eshmun ↑

I agree that EBIT can be enhanced by capitalising development costs but that's just the phase we are in. I think you might be suffering from a thing called BDR-syndrome which can be brought on by having owned that stock and confusing that stock for other stocks. RSG is not BDR.

You claim that the sulphide result is a shocker but you really have no basis to make this claim as you don't know what contributed to the feed through the sulphide circuit for the quarter. The annuncement just doesn't break that down. There are potentially 5 sources of feed for this circuit. Gold already in circuit, stockpiled sulphide ore, long hole stoping ore peripheral to the main ore body, development ore and ore from the cave mine itself which we know only started getting mined in Dec (we don't know if any of this cave ore got processed in the quarter).

If you look at the previously projected monthly mine production chart presented by another poster higher up in this thread you have roughly 46-48kt of "generic" UG sulphide ore expected to be mined in September which could represent long hole stoping ore or development ore. Then you have about 55-57kt of ore of the same type expected to be mined in October and a further 76-78kt of ore expected in Dec which could in theory also comprise of some cave ore as well.

Now we don't know if all these expected mined tonnes would have been processed in the Dec quarter, it's more likely that some of the September quarter ore will have been processed during the December quarter which would skew the sulphide results further to the downside as less sulphide ore will have been mined during that quarter.

Based on the expected mining rate as published and outlined above and not knowing the composition of the ore types let's just say prior to the quarter 180,000 tonnes of sulphide ore were expected to be mined UG at Syama.

If we use the reserve grade of 2.7 g/t as a guide (it would be fabulous if all the mined ore had this as an average grade) then that equals 486,000 grams of gold mined or 15,627ozs.

The actual production from the sulphide operations was 21,554ozs which exceeds the amount of gold which was reported and expected to be mined from UG for the December quarter (including at least a likely 15% loss due to recovery which makes the overall even more impressive). Your assertion that the performance of the sulphides operations was a shocker is false based on the previously projected and announced ramp up mining rate for the Dec quarter. The performance of the sulphide circuit actually exceeded expectation for the Dec quarter.

Also it is worth noting and highlighting the performance of the oxide circuit. The announcement clearly states that

"The first quarter of oxide ore production from the new Tabakoroni satellite open pit mine has provided high grades and recoveries and resulted in a record quarter for Syama oxide operations."

Read high grades and recoveries!!

The naysayers need to come with more informed arguments in my opinion. Esh

Expand

Also a little reminder for people that our Tabakoroni mine which has just been reported to have provided high grades and recoveries during the December quarter "currently has a Mineral Resource of 778,000 ounces (oz) at 10.2 million tonnes (Mt) @ 2.4 grams per tonne (g/t) Au and a current Ore Reserve of 296,000oz (3.16Mt @ 2.9g/t Au)."

The company is currently focusing on mining the oxide at this deposit but the sulphide ore has a lot of potential to add to the sulphide circuit in the future. These are good grades for an open pit that looks like it's on top of a hill.

When the Syama cave mine starts producing 200kt/month of ore at 85% recovery in June people will be buying this stock with their ears pinned back IMO and you'll all understand what I am talking about. Still a good opportunity for a cheap entry here IMO.Esh

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(20min delay)
Last 43.5¢		Change 0.020(4.82%)		Mkt cap ! $1.543B

Open	High	Low	Value	Volume
42.5¢	44.5¢	42.0¢	$6.468M	14.85M

Ann: Production Update December Quarter, page-60

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Ann: Production Update December Quarter, page-60

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