Brigus Gold Corp. (BRD)

[gharma]

Primeros Incurred ... all-in sustaining costs of $974 per ounce in the third quarter

Let's flesh that out a little. AISC does not include, among other things, taxes and interest expenses.
The discussion in the most recent quarterly financials says the company estimates $14 million increase in taxes due to the Mexican law changes. It is somewhat "iffy" to say over and above what this amount applies due to the credits recovery in 2012 compared to the lack of this in 2013, and the impact of foreign exchange, etc. All the same the report states $5.4M year to date in the taxes for the recent year, so I will just say taxes of at least $5M plus $14M = $19M taxes in Mexico 2014. A couple years remain on the note for San Dimas which will be fully repaid Dec 2015. As at end of Sept 2013 the balance was $32.2M which, given the 6% annual rate appears to indicate approx $2M interest for 2014
So, using 110,000 production for 2014 from San Dimas and at least $23M beyond what is accounted for in AISC it looks like there is at least $200/ounce more expense above that $974 AISC. When that is combined with current gold pricing and fact that half of the free cash flow from San Dimas is paid out as part of the promissory note agreement until that is extinguished (end of 2015) it becomes clear why the MD&A says Primeros is looking to enhance its liquidity flexibility

The Company expects its current cash resources, as well as ongoing cash flow from the San Dimas mine, will be sufficient to fund its operations and certain potential acquisition opportunities for the foreseeable future. Nonetheless, in order to enhance its financial flexibility, the Company is in negotiations with a major financial institution to secure a revolving line of credit of $75 million, which it expects to complete in Q4 2013, and is also considering other financing initiatives

Things will be more clear, hopefully, mid-Feb after we see the new quarterly report.