BBOTCS Re GORO was a little overzealous with their 2012 projections and revised them down 2 times. They had some operations troubles (water electricity ventilation)and Q2 numbers suffered terribly. While they were rehabbing and opening new stopes, production suffered. The problem is, their is a Class action lawsuit claiming GORO did not give any public warning, alluding everything was OK. Dont quote this, but I hear, their is very little support from investors on this. Like 7000 shares worth of supporters.
GORO is still going to be operating at near or record levels of production for 2013. The upper end of their guidance range is +11% over 2012. With the class action, Im sure they are conservative but they did provide the following disclaimer
Significant planned
upgrades to the mill include the addition of another ball mill (already acquired by the Company)
to the grinding circuit, thickener surge tanks, and additional float cell capacity as the Company
targets increased production tonnages by mid-2013 into 2014. Although the Company does not
plan to shut the flotation mill down for extended periods of time, construction activities will
periodically impact daily production. Any extended period shut down could affect targeted 2013
AuEq production.
GORO is still going to be nearly the lowest cost producer out there. They have 36 million in cash and +6 million in Gold bullion. The .06 divy costs them just over $3 million/mth. I dont think the divy is in jeopardy and especially don't see it being cut in half unless Gold goes below $1500 or something, in which case everyone else will struggle more!
They spent nearly $5 million in cash buying back their shares in 2012.
Im a little confused with the verbage for increasing production tonnage as I thought their modular set up, already in place, was setup to produce 200k oz/yr. I think the add. CAP EX will be minimal here.
At Agulia, they have 4 years of 10gpt production left from 500m strike x 500m depth open both ways with several other very high grade areas from their 200sq km. They could increase the tonnage and lower the grade anytime if needed.
I think at $14 and 750M MC its still cheap and you get paid to wait for the POG and production to raise.
Just my 2 cents
Checkmate28
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