RE:RE:RE:RE:RE:RE:Convertible Debt Presentation - German Gold ShowI wouldn't expect Q4 production to be much different than Q3, based on JM comments where he has said that 2023 production will be near the mid-point of guidance and Q4 grade would be about 0.72/g.t.
I expect that tonnes stacked will be no more than 2,600,000 tonnes vs 2,300,000 in Q3 and 2,500,000 in Q2.
Ounces stacked would therefore be 2,600,000 x 0.72 / 31.1 g/oz x 76% recovery = 45,747 oz.
The delayed leaching effect will probably reduce production to ~ 43,000 oz and oz sold will probably be ~ 41,000 (5% production royalty). The higher Q4 gold price (somewhat reduced by hedging 13,500 oz at $1887) will be offset by higher operating costs than Q3 and the $5 million derivative gain in Q3 will become a loss in Q4.
Operating earnings were $18 million in Q3 and JM said he expects a similar number in Q4. Still not enough to meet debt payback requirements of $25 million/quarter to the end of 2025.
I expect 2023 earnings to be less than $0.45/share, down from $0.55/share in 2022 and $1.77/share in 2021.
If one were to assign an earnings multiple of 20, $0.45/share would translate to a share price of $9.00, but 20 is too high a number for a mine with a 10-year life. 15 would be more reasonable - allowing for future production from other assets.
An analyst 12-month target of $24 or even $16 would appear to me to be out-to-lunch.