Gold Digger: The big Aussie miners are raking in cash. What about the little guys?
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It’s reporting season, and the big Aussie gold miners are sitting pretty with strong profits and some company building M&A action.
What about some of the smaller producers? It’s a mixed bag.
The poster child for missed guidance, Dacian Gold, missed FY21 guidance.
The WA miner – which has struggled with operational issues at Mt Morgans since production began — produced 106,919oz at an AISC of $1,552/oz, versus a target of 110,000-120,000oz at an AISC of $1,400-$1,550/oz.
Still making profits though. The company has cash and gold on hand of $41.8 million on 30 June.
FY22 production guidance is similar — 100,000-110,000oz at an AISC of $1,550-$1,700/oz (AISC also includes all initial re-start capital for the high-grade Westralia mine area).
The company is also getting in on the M&A action, acquiring advanced WA explorer NTM Gold (ASX:NTM) late last year.
Like Dacian, Gascoyne has also experienced rough times.
Lower than expected grades saw it go to the wall in 2019, just one year after mining began at the flagship Dalgaranga operation.
In an “unusually successful” recapitalisation in 2020, pre-existing Gascoyne shareholders ended up retaining an ownership interest of ~20 per cent.
Dalgaranga hit guidance of 77,278oz in FY21 at an AISC $1,308/oz.
The company – which has about $24m in the bank – eked out an $800,000 profit for the latest quarter.
In June, the company announced plans to acquire neighbouring junior Firefly Resources and its shallow high grade Yalgoo deposit.
“Access to shallow and higher-grade ore and a vast exploration package within trucking distance of Dalgaranga has the potential to be a game changer for Gascoyne over the next couple of years,” Gascoyne managing director Richard Hay says.
The company expects to produce between 70,000 and 80,000 ounces of gold at AISC of $1,600 to $1,700 per ounce for FY22.
RED 5 produced 76,104 ounces at Darlot in FY21 (guidance: 74,000 to 78,000 ounces) at a hefty AISC of $2,273/oz (guidance: $2,240/oz to $2,290/oz).
“As part of an exhaustive and detailed budget review process, Red 5 has evaluated a number of initiatives for enhancing the life of the Darlot Operation, including accelerating mine development to access future resource areas,” the company says.
FY22 guidance will be provided in Sept quarter, it says.
But there is a step change coming for the company, with first gold at the 4.1 million ounces ‘King of the Hills’ deposit on track for the June 2022 quarter.
Red 5 plans to produce 176,000oz per annum over the first six years of a 16-year mine life at an AISC of $1,339/oz. Much better.
The Morila gold mine in Mali has produced over 7.5 million ounces of gold, mostly in the 2000s, at grades that were among the highest in the world — earning it the moniker ‘Morila the Gorilla’.
Firefinch, which acquired Morila in late 2020, wants to return the operation to its former glory.
The recommencement of mining at the main ‘Morila Superpit’ in the second half of 2022 is expected to support growth up to 200kozpa of gold production by 2024, at an AISC of ~$1,520/oz.
Quarterly production for the period April to June 2021 of 12,555 ounces was a new high for Firefinch, and towards the upper end of previous guidance (11,000 to 13,000oz).
Quarterly production guidance for the period July to September 2021 is 13,000 to 15,000 ounces of gold.
Pantoro produced 8,880 ounces at a reasonable AISC of $1,570/oz from ‘Halls Creek’ in the June quarter.
The miner has cash and gold worth about $50m, and no debt. Not bad.
But, like many of the miners on this list, Pantoro is aiming bigger.
Its golden egg is the 4.2moz ‘Norseman’ project in the eastern goldfields of WA, where a recent DFS detailed an initial 7-year plan to produce ~108,000oz per year at a low AISC of $1,292/oz.
Construction planning is highly advanced, Pantoro says, while a monstrous 100,000 metres of drilling is underway with the aim of doubling the current mining inventory.
In June, the miner admitted that June quarter output would “be below expectations” and provisionally fall between 56,500–61,500oz.
Despite this, Westgold’s output for FY21 was expected to be between 245,000–250,000oz with the company expecting costs to be within AISC guidance of $1,460-1,560/oz.
Importantly, Westgold is on track to report a FY21 net profit before tax (unaudited) of ~$110 million “marking a significant positive inflexion point and turnaround year for the Group after several years of heavy capital investment in our Murchison assets”.
‘The Boda Discoverer’ produced 13,500oz last quarter from its Tomingley operations – above forecast – at an AISC of $1,669/oz.
It sold 11,526 ounces for the quarter at $2,401/oz for revenue of $27.7 million.
FY2021 gold production was 56,958oz (guidance 50,000oz to 55,000oz) at an AISC of $1,320/oz (guidance $1,400/oz to $1,550/oz). Wonderful.
FY2022 production guidance for Tomingley is 55,000oz to 60,000oz at an AISC of $A1,450/oz to $1,600/oz.
Alkane has $73m in cash, bullion, and listed investments at the end of the quarter.
Here’s how ASX-listed gold & silver stocks are performing:
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