RE:RE:Bonanza Ledge, the POG and 121,501,706 shares outhalcro wrote: BGM last (and firstly, LOL) produced gold in meaningful quantities in the years endingin February, 2011, and 2012.
Total revenue and expenses were:
Revenue $24,017,000
Mining costs $17,108,000
Cash cost admin $14,402,000
Net loss on production $7,493,000
Left out of the above were non-cash items such as share-based compensation and depreciation, and cash-cost expenditures of $39,370,000 for exploration, reclamation and repairs and maintenance.
Restated, bluntly, for every dollar in mining revenue, mining and administrative costs were $1.31.
POG in 2010 likely averaged $1,300 (U.S.); 2011 likely $1,650 (U.S.); and 2012. Jan. and Feb. likely $1,700 (U.S.).
Sad to say, based upon the above, I figure that BGM’s all-in cost for producing an ounce of gold in the above periods was $1,703 per ounce for 2010 production, $2,161 for 2011 production and $2,227 for 2012 production.
Sort of puts the boots to that $900 all-in cost, don’t it?
Well, yes, the facts you present do support
"Restated, bluntly, for every dollar in mining revenue, mining and administrative costs were $1.31." My feeling is that selective accounting is too easy to do to make the short term look attractive in general -- for example, do some over burden removal one year but do not count that asa production expense and then go in and mine in a subsequent year to get a better all-in cost.
I strongly argue that the only credible way to look at any producer is on the basis of top line revenue, bottom line net, and ounces produced. And for the current crop of TSX producers, this picture does not look good, even when you exclude the quarters with impairment charges. One of the good guys is someone like a Yamana who as far as I know haven't had to take any extraordinary impariment charges, mostly because they do their economics on a very conservative POG assumptions.
But the longs shouldn't worry because I hear tell the BBoS is chanting the matra that although we loss money on every ounce produced we will in future make it up by cranking up the production volume.... Well, good luck with that plan BBoS :)
Oh, yes, one question for Halcro -- have you noticed any trend in BGM financials that suggest the non production expenses are always highest when there is production? Seems me that is the case but I don't have the numbers without wading through the quarterlies...