AISC - Does it include Debt Servicing ??
Any Comments Marben. IMO, AISC should include debt servicing (not paying down but the cost of servicing revolving debt).
Also, if EDV was to shutter down operatons on the high cost tabakoto and nzema operations, will it reduce AISC or because of a resulting decrease in cash flow, is not an option in the first place. Which means, they will be selling that Gold at a loss to the market.
Even at today's Gold Price at 1140 and with EDV AISC of 990, the company can generate approx 67 million in cash flow on an annual basis. Also, EDV still has those Gold puts at 1150 which are now in the money. I believe the last tranche expires in March 2015. Anybody went through the MD&A for Q3 to see it any more hedges were bought in Q3 beyond March 2015.
What happens if Gold Price equals AISC. That is my concern Marben. They need to manage the risk of a falling gold price as well as bring AISC down. Upside is essential but you also need to watch the downside risk.
JMHO.