Originally posted by worzel1
I think that RSG won the lottery this qtr with the performance at the Syama Oxide plant and the overall improvement in market sentiment created by the rising gold price.........At a cash cost of just $625 per oz the oxide plant kicked out $38M of cash in the qtr. That's a whopping $26M more than normal........
In fact it cost $5M LESS in cash costs to produce an additional 12,000+ ozs of gold.......Almost unbelievable.........Take the $26M away from the qtrs reported $43.3M of operating cash flow and the qtr looks a bit sick.
Ravenswood is loss making, perhaps more accurately described as subsidised care and maintenance until they work out what to do. Syama oxide is obviously encountering problems, hopefully just start up issues, but until we get some clarification on costs it is a wait and see. Even Bibiani costs blew out to $3M this qtr.
Anyone who has complete confidence in this years retained guidance and forecast should go back and listen to JW's "Open briefing" in January last year.......Main reason given for retaining guidance was the expected improvement in grade in the second half due to Syama UG ramping up......12 months later and we still haven't seen it...........
Even the raving bulls seem to be a little more cautious......My view is that London is needed to replenish reserves, if everything was going to plan I don't think it would be pursued now.
This years guidance is in the hands of the Oxide plant.
Some good points Worzel
It isnt difficult to get a $5M cash cost reduction when open cut mining a narrow high grade deposit. Basically did the hard work in September quarter cutting back and opening up the orebody.
Had the good fortune to meet one of RSG's former mining guys last month at a pre Christmas function who said senior management had been weighing up selling the Tabakoroni deposit project as it was too far away from Syama and they wished to concentrate exploration on Syama South. Thank goodness that didn't happen as Tabakoroni looks to be the saviour and the Nafolo discovery, too low in grade. The understanding I took away, was that they have at least two years of high grade oxides and some very sweet higher grade sulphide ore that will likely offset a portion of the Syama UG ore in a couple of years.
As for the CEO's promises, he's apparently an ex Wallaby rugby player. Our Australian sporting personnel are always getting ahead of themselves!
Apparently the London listing has more to do with them getting out of Australia and focussing on Africa. London investors have a much more risk on attitude when it comes to Africa.
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