Post by
Swing4theFence on Jun 18, 2010 1:22pm
High cash costs due to exchange rate
Australian 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
Comment by
FortMacMoney on Jun 19, 2010 8:15pm
Good informative post Swing4theFenceAny estimate when the second quarter results are do out?thank you
Comment by
dollpartz on Jun 22, 2010 12:48pm
In May, the exchange rate dropped dramatically from .93 to .82. Although in the last two weeks it has since made up half that drop. I've read various reasons for it, but it seemed to be tied in with the drop in commodity prices. Canadian dollar behaved similarly.