Q2 ..subpar but improvingJust a quick summary for those who do not check on their investment.
Mill rate was 2,289 tonnes per day for the plant before heavy rains and ,mechanical breakdowns.
After implementing changes in preventive maintenance and improvements in mining and process operations, production averaged 2,549 tonnes per day for the period from Sept. 8 to Oct. 6, with gold pours totalling 6,120.5 ounces, equivalent to a daily average gold pouring rate of 212 ounces, or 6,300 to 6,500 ounces per month.
This was expected to reduce cash costs to about $600 per oz
This upward trend in production continued to Oct. 13 with an average production rate of 2,779 tonnes per day and a daily gold production average of 226 ounces or about 6800 oz per month (about 80,000 oz per year).
After Oct 13, they again encounted production constraints which continued thru most of the remainder of Q2.
This is why production was 13,500 oz and not the 17,500 oz that most of us expected for Q2.
Cash costs did however decline to about $750 per oz, consistent with increased production in Q2 relative to Q1.
There is little doubt that cash costs will decline to about $600 per oz, as production increases to 100,000 oz per year.
Its my understanding that production rate is once again reaching new highs and that the CIL is progressing as expected.
Debt financing costs were quite substantial in Q2.
These have now entirely dissapeared due to the recent financings and the gold sales.
Free cash flows consequently will now be quite substantial.
Also, PTQ has about $160 million in forward tax losses to protect future earnings and about $55 million in cash will be added when all of the current warrants are fully exercised.
Taken together, while Q2 was sumewhat dissapointing, we now have a debt free company with strong cash inflows from increasing production at lower costs , while warrant exercise will add bundles of cash to fund the cost of production expansion now underway.
Its good to get Q2 out of the way, as it was constraining the share price.