RE: Resources / Detailed D.D.Hi franzneuman,
I welcome anyone and everyone to express their take good or bad; I am developing a complex talking to myself!!! My understandng from the presentations (most recent is late Nov08, with the AGM presentation - year end is June 30 of each year by the way - that the mine at Andorinhas has an "initial 5 year mine life". This is from the higher grade underground reserves at Mamao. It also has backup open pit reserves at the Lagoa open pit. It has significant exploration potential for adding high grade reserves at Mamao and numerous targets surrounding this deposit.
As you may know when a mine is of the underground variety this precludes those eye popping million oz reserve numbers - these are open pit mines which typically have much lower reserves and have a blend of higher and very low reserves. Costs are very high in equipment, capital and energy. Often what is masked are the many millions of tonnes of materials w/ negligible gold content that must be moved to get to juicier zones. What is expressed as reserves vs. resources and what is ultimately produced is usually very DIFFERENT from a simple xx million tonnes / xx tonnes per year in initial or projected production. Underground developments have their own challenges of course so it is absolutely critical to catch onto proven underground miners, and they tell the tale in annual production and profits, as underground following the gold from drilling determines the trend. (You don't bust the bank trying to prove the huge nos., you get to it.
Andorinhas development was commenced in Nov 2006 and mine commissioning and first production March 2008 - this is amazing turnaround and the mill is the only one in the region. Production at the 50,000 oz rate s/b announced early 2009 to the best of my knowledge. In the most recent presentation they comment that 04 to 07 production was 400,000 oz at a cost of $201avg; cost of Andorinhas is stated as under $300 oz in one slide and approx $300 oz in another. They've operated 5 mines in 10 years - they run it grow the company, pay the divvy and find the next opportunity. They lost $17 m in year ended June 08 which includes $10m in expensed exploration at Andorinhas et al and iron ore feasibilty studies. (I dont' track iron ore prices and surely they are down like everything else - they previously stated that this could produce the equiv of another 50,000 gold per year - would be less now but you get the picture. They could spend money to increase the 43-101 resources but said they will not do so - focusing on just getting it on stream - hoping for this in 2009).
The co's dividend record is as follows 2001 $.045; 2002 $.05; 2003 $.055; 2004 $..06, 2005...increasing to 2007 $.075. As two mines are closing in year ending June 08 and due to spending the money on the new mine and iron ore, they cut the 9th consecutive year divvy to $.03, as 2009 will be protitable again. In addiiton to the new mine at Andorinhas, they earned A$20m on the Complex shareholding sale. They sold this holding for C$6.15 in July 08 and due to market turmoil the shares trade today at just $C1.47.
At the end of Sept they had A$60m in cash and take the market cap subtract this price and ALL OF THE REST OF THEIR ASSETS HAS A MARKET CAP OF A$6 MILLION. We're talking Andorinhas mine and mill; iron ore ($$$$$); Sandstone mine still running (down); entire functioning mill in storage for jv in Australia; great mgt; 3.6% of a small Venture co. Volta Resources; zinc in Australia (sandstone); Mongolian coal props; various other exploration concessions in Brazil. They are aggressively looking for acquisitions to participate in, to own and or similar share acquisitions like Comaplex. My argument for the best Jr. out there. See the presentation and see if you catch the fever. Good luck to all and of course I own this co. as my major gold exposure,uh call me crazy for owning a jr.