Gold production costs.

Discussion in 'Gold' started by sammysilver, Jun 5, 2019.

  1. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    Full article in today's Sydney Morning Herald. (I cleaned up some spelling mistakes) I have extrapolated the underlined passages below.

    Gold producer Dacian Gold is down 57 per cent to 68 cents after emerging from a trading halt this morning. It previously traded at $1.58. It revealed a downgrade in guidance for the current quarter of between 36,000 and 38,000 ounces costing between $1,500 and $1,600 and ounce, compared to previous guidance of up to 55,000 ounces costing a maximum of $1,150 per ounce.

    "The guidance revision follows underground contractor performance issues resurfacing, which have resulted in lower productivity than previously anticipated," the company told the market this morning.

    Dacian had problems insufficient maintenance staff, and then a ball mill motor failed for three days, and lower than than expected grade in Westralia. Its preliminary 2019-20 production guidance is for between 150,000 and 170,000 ounces at a cost of up to $1,450 per ounce. Gold currently sells for $1,895 per ounce.

    "Following several recent unsolicited inquiries from corporate entities, the Company has commenced a strategic review process to consider potential corporate and funding initiatives which may culminate in a change of control transaction." Dacian started a conference call at 10.30am.
    36,000 and 38,000 ounces costing between $1,500 and $1,600 and ounce,
    say 37,000 X $1,550 = $57.35 Million, at $1,895 = $70M for a profit of $13M

    55,000 ounces costing a maximum of $1,150 per ounce.
    55,000 X $1,150 = $63.25 Million, at $1,895, = $104M for a profit of $41M

    Just spit-balling, but it shows a 300% drop in expected earnings. It's another variable in the spot Gold price.
     
    ozcopper likes this.
  2. ddevil

    ddevil Active Member Silver Stacker

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    That is a big drop
     

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