Read between the lines, it was caused by Ore Grade decline in Engenho. In the June quarter, I think the forecast was based on the average ore grade (3.2 g/t) of the entire year, so ideally they could reach that figures with the tonnages of ore they mined in last quarter. However, the ore grade decline to 2.9 g/t so the actual result is behind the target.
I was disappointed with the current performance too, but IMO, operationally they had done every thing they could in Engenho, but they just didn't have luck with the mine. Some gold mines have ore grade consistent / increase during the development, some mines would just decline. Don?t forget this, - gold mining is a risky business for a reason.
Honestly, I don't think they can increase production in the Engenho mine without Crista joining the game.
So Crista is the key, and November is the moment of true. If they do every thing right in the next quarter, you will see they start to turn back to cash flow positive.
If they can successfully pull out from this Engenho dead lock, and brings Crista, Ohlos, and Torrecillas to production. It will be the one of the best turn around in the recent market for gold miners.
Risk Vs Reward, Greed Vs Fear. It's your money and your choice...
MUN Price at posting:
18.0¢ Sentiment: Hold Disclosure: Held
