LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

Net Free Cash Flow

[LTGoldBull]

The market wants “Real Earnings” hitting the bottomline of these Gold Companies. (LSG’s problem over many quarters) Will this new Mill Expansion be the turning point for profits?
Tony’s 12 August comment,
“Commissioning of the expansion commenced late last month with our new crushing and grinding circuit now ramping up towards the new design capacity of over 3,000 tonnes per day, which is expected by early September. When we achieve this level of throughput, our production will increase, our unit operating costs will improve and our capital requirements will decline dramatically. At that point, we expect our AISC(2) to improve to around US$1,000 per ounce, with the Company on track to generate net free cash flow during the fourth quarter at current gold prices.
Read more at https://www.stockhouse.com/News/Press-Releases/2013/08/12/Lake-Shore-Gold-Reports-Record-Production-and-Lower-Operating-Costs-in-Second#ApH1zkbZoQ3iZ6Cb.99”
So does “Net Free Cash Flow” mean positive EPS? Maybe
(if AISC get to $1000, POG $1350 today, $350 is profit?
Cheers, Mark
Term “Free Cash Flow”, courtesy Wikipedia answered,
“In corporate finance, free cash flow (FCF) is a way of looking at a business's cash flow to see what is available for distribution among all the securities holders of a corporate entity. This may be useful to parties such as equity holders, debt holders, preferred stock holders, convertible security holders, and so on when they want to see how much cash can be extracted from a company without causing issues to its day to day operations.
The free cash flow can be calculated in a number of different ways depending on audience and what accounting information is available. A common definition is to take the earnings before interest and taxes add any depreciation & Amortization then subtract any changes in working capital and capital expenditure. A number of refinements and adjustments may also be made to try and eliminate distortions depending on the audience and their intentions.
The free cash may be different to the net income for a particular accounting period as the free cash flow take into account the consumption of capital goods and the increases required in working capital. For example in a growing company with a 30 day collection period for receivables, a 30 day payment period for purchases, and a weekly payroll, it will require more and more working capital to finance its operations because of the time lag for receivables even though the total profits has increased. If the net income was extracted from the business it would cause cash flow problems for the business.”