Surprise, surprise.
Thought we had the quarterly laid open just more than a week ago?! I have overlayed them both in the attached graphics to illustrate my thoughts.
I would rate this 2nd report as an attempt to react on the share price massacre after the ANN of the first quarterly report.
If you scroll back through the HC-threads main topics of concern were:
* AISC of March significantly higher than in record-low February - the market awaited apparently again over-delivering versus guideline which did not occur.
BLK have added an explanation: 186$/oz for “abnormally-high” capital investment, mainly for the tailings dam lift to be completed in April. To me this was known/foreseeable and should have been taken into the account for the half year guidance (which they did meet so far). So expect this to occur in the April numbers as well!
* High grade stockpiles below expectations 127kt @ 1,5g/t (Feb.: 144kt @ 1,7g/t and propagated to grow).
Now they have moved ore like hell in just a week and increased the grade massively. 162kt @ 1,7g/t means they have not just added 35kt within a week, but if the average grade increased as well by 0,2g/t implying these 35000 tons should have had a grade of 2,4g/t.
You could argue that there is a high sensitivity to rounding (1,7g/t could equal 1,65g/t and 1,5g/t could be 1,549g/t) but this would still mean it requires 35kt @ 2,0g/t to upgrade the average grade of the complete stockpile. Playing devil’s advocate, you could now argue that the mill has been fed from the ‘old’ stockpile. So take 7 days with an average throughput of 5300tpd which gives you another 37100 tons. This leaves the remaining stockpile with 90kt @ 1,5g/t and requires 72kt fresh ore @ 1,95 g/t. Now do the favorable rounding as above and you get a required grade of 1,78g/t to reach the overall status of 162kt @1,65g/t.
Sounds borderline possible, but if you take the rectification from April 9 “The Operation’s high grade stockpiles total 127kt @ 1.5g/t Au, being lower than forecast in Jan’18 due to lower mining material movements.” and have a look on table 2 from the actual report seeing that Ore moved and Ore mined are about DOUBLE the numbers compared to the previous quarter they lost me on this one…
* Plant recoveries 89,5% for the quarter meant 86,ish% for March following 91,2% and 90,6% in January and February. They claim deeper transitional ore to be the reason, whereby the mill should be capable of handling this as it is designed to process as well the ore from the UG operation. Approx. 4,5% loss in recovery meant sending 385oz or A$ 643000 to the tailings!
* Worse stripping ratio in March vs. Feb.
Now, here it gets really inconsistent. 2,5:1 in April, 9th ANN versus 2,9:1 in April 16th table
No idea which number is right???
To me this looks like a quite hasty, unprofessional attempt to calm down the market after the drop following the 1
st quarterly release. It tries to give answers but opens up more questions.
You may get the impression that not much has changed since BD (if it wasn’t himself writing this report
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