Expectations

Expectations have been set by the company. Let's see how we're going...

"Expected Dec-Qtr cash flows are receivable $34,652,000 from the sale of zinc concentrate. (excluding the Prepayment of Sales included in the previous quarter as outlined in receipts."

Based on the above and using the most recent Dec-Qtr zinc concentrate forward sales as an estimate (10kt = $15.3m or $1530/t), the company expects to sell 22.64kt this quarter.

The last forward sale was achieved after the 11kt shipment. Given the company is preparing a Dec shipment, it is likely a further forward sale of at least 10kt-11kt is possible. This would create Dec-Qtr sales between 20-21kt which is reasonably close to expectations. Therefore, the Dec shipment is important for the Dec quarterly statement (released late Jan-19).

The company also reported zinc concentrate production of 7kt in Jul-Sep and 7kt in Oct. We know 11kt of this is now in China, leaving 3kt in the stockpile.

The Oct monthly update mentioned 7kt produced with downtime across half of the month so at full capacity we could have produced 14kt. The Sep-Qtr reported 13kt forward sales for October so let's assume quite fairly they expected that rate of production.

Given the Oct monthly update reported ongoing efforts to minimse downtime plus likely improvements in concentrate recovery, we could expect 13kt produced in Nov (10kt+ at a minimum). This would be a big step in the right direction towards their 20kt+ phase 1 monthly production target.

Assuming an optimistic case of 13kt produced in Nov, there should be 16kt in stockpile. This would be enough to fill another shipload and generate more forward sales.

I noticed on BOM site at Century mine a couple of wet days so the Nov monthly update will be an interesting read to see how well they have tackled all challenges. 

Keep up the hard work team.