St Andrew Goldfields Ord STADF

RE:How bout that Taylor grade!

[SASFan]

The grade beat has huge implications if it is consistent going forward. It essentially comes out to a 20% increase in gold production with no corresponding increase in expenses. 

Management claims Taylor will cost about C$135/tonne to mine, transport and process. There's a 2% royalty on the mine. Recovery should come in around 95%.

I'm assuming a USD/CAD exchange rate of 1.40 (currently 1.42).

At 6.27g/t, I was coming out with mine cash costs of US$525/oz. 

At 7.55g/t, it comes out to US$425/oz. This is ridiculously low. 

At 200K tonnes milled annually (4Q run-rate was 275K tonnes), Taylor produces 44K ounces per year and has a "cash margin from mine operations" of C$40MM annually. To put that in perspective, Holt produced C$30MM of "cash margin from operations" through 3Q15. 

Once up and running, Taylor should have significantly lower CAPEX needs than Holt. 

Taylor could be a cash cow going forward.