cncventure, Some observations regarding your posting. Production...

cncventure,

Some observations regarding your posting.

Production over Q4 was 26,542 oz but you need to also factor in that they have 60,000 tonnes of mined ore sitting as inventory in completed stopes due to the lack of haulage capacity whilst they are having to haul excessive waste from their new in-mine infrastructure. So that is c. 13.9 koz of contained gold waiting to be hauled to the mill.

Obviously, once they have completed those various improvements the available haulage capacity will increase (even before the new service shaft is available) and more ore can make it to the mill - with consequent improvement in mill utilisation. More ore at improving grades makes for higher production and higher production reduces the overall unit costs in the AISC figure.

You state that they had negative free cash flow! Not according to my calculations. ie. cash costs of US$10.351 plus investment outflows of US$16.4m add up to US$26.751m, yet their Q4 sales were US$35.1m. You cannot make assumptions purely based on differences in reported cash and bullion from the prior quarter (-US$0.9m) without taking into account the difference in their bullion holdings which changed over Q4 due to the additional sale of 3.8 koz gold whereas at the end of the March quarter they sold 6.771 koz less than production (ie they had increased their stock of bullion). There is also the possibility that some of their FCF was used to reduce debt.

You also state "their reported reserves dropped" ?? Where did you get that from?

Their reserves were quoted as 450k oz at 7.22 g/t in the Q4 report which is the same figure reported in the 2014 update. Obviously they will have depleted their reserves over the year but they always aim to add new resources and reserves through in-mine drilling and development. The current figures will be available once they make their new report.
CPDLC