We all read what we want into the figures....and not to waste to much time on this.
SLR made more than $2m if you consider they banked $26.5m for the year,$11m was from sale of Great Southern and
Murchison assets with a further, but not included in the figures, $1.5m from MGV in August.
Amortisation of things like depreciation and tax losses "helped"reduce the profit.
So did things like $18.5m expenditure on Maxwells and $13.2m on exploration. Pleased to see exploration budget is $1.4m
less this year as it indicates the Company is comfortable with resource.
I don't get depressed about the LOM even though the reserve appears to be a bit skinny at .47 Moz. There is more than 1.6 Moz
in measured and indicated catigory. Total resource inventories of 3.29 Moz gives certainty to long mine life.
Luke Tonkin made the point in his Diggers and Dealers address that the nature of the geology makes it difficult to increase the
reserves. The point was also made that approx 30% of 2016 production didn't come from reserves. It came from both the indicated
and inferred resource.
Spending millions drilling for the sake of converting resource to reserve is a waste if it can firstly be drilled more cheaply as you go and secondly it is safe economically to mine the resource.
After a decade of operating the Mt Monger camp I expect SLR Geologists and engineers have a good understanding of the geology and the most efficient way to mine it.
The AISC are up a bit and yes high at around $1350 an ounce, but in line with what the CEO indicated. He has also said that the costs will drop once mines like Maxwells and CEB reach full production. Spending $18m on Maxwells and up to $11 on CEB up front doesn't help AISC but will in the long run. Long run being as soon as 2HFY.
Yes Aldiss will follow ubsequently and effect cash costs but likely by a lesser amount. One mine operating at $1050 an oz doubtless helped the AISC not exceed $1350 for FY17. Two mines,then three mines producing even close to Daisy costs will result in lesser impact from mine capital expenditure in the future.
SLR to 30th June had equivalent of $81m on hand including cash, bullion and investments in other entities.
Approx 16 cents per share so it's not a stretch to say the market cap is in reality about $145m.
Few analysts seem to forensicly bother with the financials and simply accept the profit figure as nominated on the first page of the release.
I've seen two so far with one nominating SLR earnings per share for FY17 at .002 and another more generous at .005 cents.
Therefore it's left to us to interpret as best we are able all the information put out through reports and the like.
These reports always contain more information than can reasonably be understood at a single glance and sometimes written in language hard to be understood if one isn't a mine engineer, geologist or accountant. I'm none of the above but I'm satisfied that I understand the stock well enough to believe at current prices SLR is very good value.
The only reason for this post is the number negative and less than objective posts in the last little while and the number of holders who may have been shaken in their confidence sufficient to sell out.... especially if at a loss.
DYOR and I've said this before, as discretionary investors we only represent 10% of the market. Funds have had a serious impact on small cap gold stocks like SLR. Like bath water the price swooshes one way when their in and swooshes the other way when their out.
Be patient there's a swoosh coming.
SLR Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
