Financials at a Glance...Not so long ago the Market did not care so much about the Financials regarding the Junior Mining Sector...but...times have changed!
Guess what? It does matter!
I believe that significant progress is being made at Brigus Gold when it comes to the bottom line...Let us take a Look!
https://www.snl.com/Cache/1500041598.PDF?D=&O=PDF&IID=4288058&Y=&T=&FID=1500041598
To keep it simple...let us focus on page 1.
Production in the First Quarter of 2012 was 16,922 ounces.
As per a statement made by Management the "Cash Cost" for the quarter was $858.00 per ounce....an operating margin of $753.00 per ounce!
Wow...what a profit!...not quite.
"Cash Cost"...is only one component of the actual "all in" costs.
There are fixed or constant costs each quarter that must be taken into account...on account that they are actual costs each quarter!
Total revenues for the First Quarter was $25,823,000
Direct operating costs (cash costs).....$14,032,000
Depreciation & Amortization.....$5,726,000
Corporate Administration....$2,585,000
Total Operating Expenses....$22,343,000
Profit....$25,823,000 subtract $22,343,000....equals...$3,480,000
What did we learn...we must not focus just on the "cash costs"...however, it is a very good guide line.
Total cost per ounce is actually $1,320.00 per ounce.
Profit per ounce is $205.00 oer ounce for the quarter.
Why in the world did digger144 buy BRD?
Simple...Gradual increase in Gold Production and decrease in cash costs!
Let us say they hit the high end of their target and come in at 20,500 ounces for the Second Quarter...remember this is an unknown and will be a market mover either way.
Revenue: 20,500 X $1611.00 (including Sandstorm gold stream) I am using the same price that they realized in the First Quarter for comparison purposes only...yet to be determined....Total Revenue...$33,025,500
Cash cost: 20,500 X $858.00 (using same as Q1)...$17,589,000
Depreciation, Amortization & Corporate Administration...$8,311,000 (same as Q1)
Total Operating Expenses: $25,900,000
Profit.....$33,025,500 substract $25,900,000 equals....$7,125,500
There goal is to reach 25,000 ounces per quarter by the end on 2012.
I think you get the picture!
Remember...it is a lot more complicated than this exercise...but...it should give you a good idea of what is taking place.
Digger144
P.S. If gold could move up to $2,000.00 per ounce the upside will go directly to the bottom line...Nice!