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Re: None

Tuesday, 05/12/2015 6:39:11 PM

Tuesday, May 12, 2015 6:39:11 PM

Post# of 11119
Q1 Results: Operations and money problems.
As usual the cash costs are suspect. Dollar figures in Cdn dollars except where noted otherwise. They report US$589/oz. In reality, they spent in total $98 million to make $64 million, including sustaining capital. Their operating costs alone were $51.4 million net depreciation. They lost $44 every tonne they processed! Multiply by the 786,300 tonnes milled and you can see why they needed the loan and fell short on the covenants. $98.3 million divided by the 45,626 oz produced gives a AISC per ounce of a whopping $2,154/oz (~US$1717 using Q1 avg. Fx of 1.2647) produced!! Even without the Fx losses, they still lose $15 per tonne milled and have AISC of US$1326 per oz. Somebody should double check this. It is the total of the operating costs (minus depreciation), plus expenses and sustaining capital ($5.6 million). I am not at all optimistic the Pd price is going to US$1700/oz any time soon.
They talk about lack of access to HG stopes in March. They would likely be the new stopes at the lowest level. There was considerable wet weather in the area of the mine in March. I wonder if they flooded the lowest level? That would make sense in that the stopes are now back in production. Was flooding the problem? Did they fill the exploration drift first? I am guessing there was flooding again this spring like 2012.

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