You'd hope that they can run the plant for a profit on 1.5 g/t. They're currently producing c. $2,300 an oz based on last Quarterly but there are obviously a lot of fixed and non-production costs in there.
ORS, like many small miners, is struggling with it's overheads burning a lot of cash - currently sitting at 22-24% of total cash burn. This will reduce only if they can ramp up production closer to the plant's nameplate (150ktpa).
AJ, scalping is one way to increase the grade. This increases the cost of mining but reduces the trucking and processing costs. Once ORS are in the 1080 drive and stoping they can be more accurate on how much they mine thus reducing dilution. The 1100 level was effectively an exploration drive thus it was wider as they searched and understood the structure.
I'm not looking at the technicals Sydneysider - this one is all about ORS fixing their operational problems of low grade reporting to the mill and then being able to rapidly ramp up production to lower the AISC and generate free cash flow. Things will be tight so every $10 increase is POG is welcomed.
Cheers
John
ORS Price at posting:
3.2¢ Sentiment: None Disclosure: Held
