GREY:LACHF - Post by User
Post by
Swing4theFenceon Jun 18, 2010 1:22pm
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Post# 17202397
High cash costs due to exchange rate
High cash costs due to exchange rateAustralian dollar has risen strongly against the US dollar which means the cost of operating the mine in US dollar terms has risen dramatically which is the bulk of the increase in cash costs.
If you look at the Q1 report the exchange rate in Q1 2009 was 0.68 and in Q2 2010 it was over 0.90 I believe which has a huge huge impact on costs.
I looked up the exchange rate and it was 0.87 today.
From this we can take away a couple of things :
1) A strengthening US dollar ( against Oz dollar ) is positive for La Mancha
2) The price of acquiring the Australian operation in US dollar terms has gotten cheaper.
Production increase scheduled for Q2 so it will be interesting to see the impact - I would expect the cash costs to decrease a bit based on increased volumes and an easing exchange rate. Should be a better quarter on an operating basis than Q1