jman
No I meant extraction cash costs.
Hedging policy concerns some and probably will for a while yet. Not up to speed on their latest policy but believe they are increasing the ounces delivered to speed up elimination of hedgebook. Will take time and be a bit of a cross to bear until increased production.
This has been bludgeoned in the last 2 days
I'm still watching this from the sidelines, I've noticed over the last 2 days that on the few occassions this has slipped below 2.00, there is ususally a brief 'mini-rally' which pushes it back up to 2.05-2.06, but probably far too early to try and predict support here, as much will depend on events in the US tonight.
jman
I am surprised how much it has gone down so even more glad I picked the high! I can only assume the hedging maybe affected negatively by the reduced value of the USD. Not sure I have my head around hedging. Cannot understand the logic of hedging a commodity in USD when costs are in AUD. Do they take out some currency hedging as well?
jman
I am back in, fingers crossed. I believed Syama was free milling. Doesn't that mean it is not refractory nor complex to mine?
Cheers
You are correct when I read more (can you ever do enough reading) I do see they will use a roasting circuit. So free milling doesn't mean what I thought. Back to school for me. Still cash costs are quite low at $370usd.
edit.
Actually just read back and it seems they have both refractory and free milling so part of the resource should be cheaper to mine even though the grade is lower. The "free milling" tag was only used to describe a couple of hundred thousand ounces.
No doubt RSG's announcement on the 09/10 that it needed another $55-60M with a 1:3 renounceable rights issue at 55c to complete its development at Syama was the worst,and I mean the absolute worst possible timing ever!
Perhaps not so resolute at the moment,
Gone into trading halt after trading price fell below rights issue price yesterday, pending a reassesment of funding options by the company. Perhaps a major shareholder will emerge as a white knight? With Syama on the verge of fully fledged production, I would be a little surprised to see it fail now.
jman
I thought it more than a little pathetic that the share price fell by more than 70% when the company had simply announced they needed to raise a bit of capital to finish off the very last bit of a mine that's ready to roll. I haven't done the sums, and the partial hedging is a headwind, but with gold at A$1200, $1300, $1400/oz, surely RSG's margins at Ravenswood/Mt Wright (and Golden Pride) would bring in enough cash before long to cover this cost at Syama anyway. It would be nice to see them announce something like that and then tell the market it can go blow itself.
Crikey,
This is one of the longest voluntary suspensions I've seen for a mining stock in a while, as a shareholder (which I am not) one would have to be a little nervous.
Crikey,
This is one of the longest voluntary suspensions I've seen for a mining stock in a while, as a shareholder (which I am not) one would have to be a little nervous. It appears as though Duncan Saville may come through as a white knight for the company, but for management to be at the whim of its largest shareholder is not an ideal place for them to be. Pretty risky play atm imho, considering Syama will no doubt also experience the usual teething commissioning problems that come with ramping a gold mines production up.
jman
I've been watching this pretty closely and wondering what's really holding them back. Trading at $34 an ounce. That's explorer levels. Going back through the Syama Progress updates each month it seems clear. Shut down, mechanical issues, shut down, low concentrate stocks, shut down, reduction in concentrate stocks, shut down.....hooly dooly!! What did they do, make the plant out of lego? Producing 4-5k oz a month. Was supposed to produce 70k in FY'90 (quoted from AGM last year - obviously something's gone wrong since then), and then 250k in FY'10. Hmm, that seems a way off. Group production 450k pa by FY'11! Cripes, if they manage that, trading at $34 an ounce now looks pretty bloody cheap. That's if they can put this lego plant together properly.RSG still stuggling to make Syama work after at least a year of stop-start production, mechanical issues and maintenance shut downs. If it ever reaches its nameplate capacity, will be a very big earner for them, but it's more of a gigantic black hole for their cash atm. $2.00 seems like a long way off, probably one for the watchlist for the forseable future. Maybe worth a look in 6 months.
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