Cup half Empty:
- From news report, acid wash circuit being off-line most of June to replace a cracked wash vessel.
- Work on the regeneration kiln was completed in June, causing it to be off-line.
- Two haul trucks were down for most of June as a result of major required component replacement. All other haulage and loading equipment was down for routine preventive maintenance.
Cup half Full:
- Both acid wash and kiln circuits will be back on-line in July, so the one month problem is already over.
- At the end of June, all 11 785 CAT haul trucks were operational and increased availability expected going forward.
- Starting in July, the mine will have two sources of ore – Central and Jasperoid pits.
- The crusher continues to outperform its design specifications. The resulting increase in crusher capacity and through put could have a substantial positive impact on future annual gold production.
- News releases confirmed that the mine is
on track for third quarter 2017 commercial production. When they declare commercial production soon, the cup will look full instead of empty. (IMO this is much more positive overall than one month of temporary problem)
- Cost in the lower quartile of all producers in the world, with AISC around $880 (he said this in the most recent radio show). Production hedged at $1275. That is a very good profit margin. No worry about the price of gold dropping to reduce margin.
- One of the safest if not the safest jurisdiction in the world.
- Production growing to 100k oz next year.
- Extra plant capacity to grow production. Adding Lincoln Hill which is higher grade will cause a jump in profitability.
- Current share price well below the $10m funding at 26 cents. That funding closed on June 29 and the $5m sale of the royalty closed on June 1, so cash balance should look very good on the upcoming Q2 report. End of Q1 they had $9.8m cash. Current production is close to break even, so they should have plenty of cash during ramp up.
- Very undervalued compared to peers.
The cup looks more full than empty to me.