RE:RE:RE:RE:RE:Be readyAwarded wrote:
Good point Esther1! I gave you a thumbs up.
AISC guidance for 2022 at Haile is $1500 - $1600. Gold is currently $1871. If the price of gold drops by $300. Haile’s contribution will be negative.
Thanks for the Thumbs up, Awarded.
Haile FCF is negative - as per my FCF analysis right after OGC announced their 20222 forecasts. ( granted not by much)
I assumed their lowest guidance for production and their highest costs for AISC and non substaining capital costs and an 1800 average gold price.
The kicker is the endless feeding of money into this mine. At least 1 billion on books.
( they are recognizing some of the waste in the final quarter, but the market is thinking it is way more until they finally see some good news ( permitting and cost reduction primarily)
If you assume an EV of somwhere around 1.4 billion US ( stock and net debt) then you would have to believe that Didipio and NZ must be at least 1 billion of that and probably more.
AISC does not include nonsubstaining capital or interest or taxes.
Forgetting the latter 2 the first is the real problem that keeps making it a cash hog.
( at least at 1800 gold or lower)
Of course higher gold prices ffix most problems as long as AISC does not rise in tandem.
This cannot be counted on and as an investor oine must worry about lower prices with a high cost mine. Also further delay or refusal of permits will make problem worse.
I am optimistic, as I believe the market has priced in fully, Hailes current problems and non of its possible good news in the future. I cannot blame the market for that. I also love that OGC is FCF positive into the future. That is what you pay dividends, buy back stock, or pay down debt ( reduce EV) with.
I was more or less kidding about selling Haile at 75% of book as I cannot imagine anyone buying it anywhere near that price until all permitting and why sell then at steep discount.
I agree that OGC knows this mine way better than anyone else so unlikely anyone can do things much better, if at all.
I am truly thankful for the Didipio restart as we would have been in a very bad situation if it had not. I did not realize how bad, when I first purchased OGC as Didipio restart simply a bonus,
Good day today.