RE:RE:NICE RESULTS!I did ask about Liguidi, as well as several other things: it is very much on the menu, but we'll have to wait & see what the outcome of the strategic review of explo. is, in November.
They did, however, say that they felt that the most material explo. upside was likely to come from Hounde, Ity and Tabakoto, in that order.
Must admit, I'm a little disappointed by bottom line cash generation in H1 (but perhaps I'm overly critical here). Quite a bit taken up by working capital increases (much improved in Q2, though), costs of Karma acquisition, associated restructuring, hedge payments and other financing costs.
P&L wise, we ended up with a loss for the half, after all the one-offs & charges.
The financial picture should be much prettier in H2, with Nzema, Tabakoto and Karma all producing more and lowering AISC - especially if the gold price stays above $1,300/oz (the revised budget is for $1,250). Moreover, there should be a reduction in one of charges.
I'm also not very happy about the way the TGM streaming facility is being accounted for: nothing explicit in the balance sheet or in costs; it will appear as a reduction in the average realised gold price (with the realised price of gold sold to the Synicate being just 20% of the spot gold price). However, this only applies to 20,000oz of production p.a., i.e. ~3% of EDV's 2016 output.
Also on the plus side, the balance sheet is now "bombproof" and the company should have plenty of flexibility to make whatever CAPEX (explo and mine development) it wishes (within reason!). The Karma problems are only in the front end (i.e. ore breaking). I'd be surprised if fixing the design of that cost more than ~$20m.
Cheers,
Mark