For your information :
Thanks for reaching out and we pleased that you are happy with our FY21 performance. We are naturally seeing a drop in the gold sector share prices across the board. I believe the market is moving away from resources during this period, albeit commodities delivered the highest returns this time last year across all sectors. We still remain bullish nonetheless and believe that we run a profitable company at these prices. The ZAR did strengthen against the dollar and as a Rand producer and $ seller, this would not be ideal for us. We still have good hedges in place at prices well over R900 000/kg and forex above R16,00 to the US$ coming through in the FY22- FY23
The variance between FY21 and FY20 was a function of numerous items but predominantly the inclusion of Mponeng and related assets into our numbers.
It is also worth noting that FY20 costs were lower than anticipated due to the lockdowns and impact of the pandemic so we did see a normalisation of costs year on year.
Other items which increased were:
• Consumables (general stores and maintenance R305m ; Support Costs R133m, Chemicals and Explosives R83m)
• Contractors (contractors at Kalgold +R171m, maintenance +R57m)
• Electricity mainly due to annual tariff increases.
•
Our AISC for FY21 was R723 054/kg – marginally more than our cost guidance which was R700 000/kg to R720 000/kg. The two contributing factors to the higher AISC was Covid-19 and our Royalties which each added around 2% to our AISC. Excluding these items – we would have been below the lower end of guidance and we are confident that we will manage to keep our costs controlled.
We don’t expect Covid-19 costs to be as high as this included a number of one-offs such as the establishment of clinics and installation of temperature readers at all operations.
AISC for FY22 is planned at R765 000/kg to R800 000/kg – about 6% higher year on year to cater for inflationary increases and the increase in electricity costs in SA. Wage negotiations are currently underway and we expect an agreement in the first quarter of FY22.
In FY22 we are expecting production to increase to just under 50,000kg across all our operations. This translates to around 1,589,000 ounces.
This is an increase in production of between 3 and 4%.
Please reach out to us should you have any further questions
Kind regards
Moeketsi Max Manoeli
MY FIRST EMAIL WAS >>>>
Hi Max,
I come back to you abour your last results. To start, congratulations ! Very great results.
I'm suprise ... the stock decrease but the market is no good on this moment BUT i think the reason is really somewhere else. You explain in your last PR your AISC will be between 750 000 and 800 000 Rands. Therefore, the worst will be 800 000 rand or... on the change USD /Rand now, 1751 USD. Ma question is : why so expensive when we know your AISC decrease strongly last year on 1460 USD ??
Why 20% increase !???
Is it just a problem change Rand/USD ? Because if your AISC will be really 800 000 Rand, your profit next year, with a average price like last year, will be near 0 USD....
Do I make a mistake ?
Best regards,
AI
