RE:RE:RE:RE:RE:RE:RE:RE:Gold priceMVargas wrote:
How true! Funny I don't recall any such posts from Nickel or anyone else when the price of gold dropped below $1200 in the fall of 2018 and Victoria had protected 100,000 oz of production with put options at C$1500. This was an insurance policy - one that is often required by the lenders to ensure that you will have the ability to repay debt if the price of the commodity falls below the FS estimates.
I don't know if you can place a lot of blame on management if the AISC is higher than forecast in the FS. It is the estimate of third-party "experts" that they hired to do the FS.
However the current positives are a fall in the value of the Canadian dollar against the US$ will cause cash costs in US$ to decrease. Also a major component of cash costs are fuel costs and these are at record lows in Canada. Interest costs will also be lower because of lower Libor rates and faster payback of debt. However royalty payments do increase somewhat with the price of gold and the cost of the call options will likely have to be rolled into the AISC.
Bottom line at US$1685/C$2350 gold, the margin per ounce will be much higher than the US$500 estimated in the original FS, and could almost double to US$ 1,000/oz when/if gold hits $1800.
MVargas - The POG was CDN 1,530 back in October 2018 - still above the put options purchased by Victoria. The point is they are bragging about saving 4M dollars for not buying those put options outright, only to pay over 40M in 2020 and 2021 (at current gold price).
The POG has been on an uptrend since 2014, and the hedge they put in place was a losing hand, played on shareholders money. A trully amateurish move.
The current management has made several mistakes that are just not acceptable, and I anticipate Orion will clean house when the time comes. This is not how a business is run!
The quarterly reporting will ultimately show how they are really doing. Until then, we are just speculating...
GLTA