Good afternoon
equity markets react negatively today to new lockdown-measures and strong corona numbers - reaching a new high of 15.000 for example in Germany. The DAX was down by over 5% during the day,a nd seems to finish at about 4% down.
Gold has surprisingly tanked today as well - partially explained with a strong US$…it´s recovering now and is trading at 1880 or 2662 A$. The A$ has been weaker against the US as well - so the base metals ( down by 0,7-0,8% in US$ today ) as well as gold have hardly moved for Australian companies.
Election is also coming close in the US…
Metro Mining - completed an excellent Quarter early in Mid-September, because tehy could not sell their bauxite at reasonable prices - as reported earlier. All production metrics have been very good, though, generating EBITDA of 9,5 mill A$ in the Quarter. At the end of the Quarter, MMI had 45 Mill A$ in cash and 35 Mill$ in debt. Corporate costs have been slashed heavily, enabling the company to restart production without the need for further capital.
West African - excellent Quarterly out today. Production numbers had been announced before - +40% to 45.700 oz in the Quarter - but financials had not been known. AISC incl headoffice etc at 1009 US$ are excellent considered, that the underground mine has only just started to ramp up. The ramp-up, as reported, has been slower than anticipated, as it has been difficult to move exparts in and out - mainly due to Australian restrictions on travel. The company has generated 39 Mill A$ in operating activities during the Quarter, despite the above! Net debt has decreased by 20 mill US$ to 124 Mill US$ and as a priority, will be repaid at current gold prices by the 3rd Quarter next year at the latest. Company sees potential to pay dividends by teh end of next year!! As reported, deep drilling has also reported some excellent results, and the next resreve statement is due by the end of this Quarter, alongside a new Life-of-Mine plan for the next 10 years of production! WAF continue to be my largest holding in the gold space.
Dacian Gold - also reported an excellent Quarter of 32.800 oz at AISC of 1315 A$, aided by some underground production, which has been phased out in August. The hedged book totaly 61.000 oz and has ben restructured to maximise cash flow now - this Quarter, only 6.000oz will be delivered against hedges as opposed to 21.000 oz last Quarter. All hedges will be finished by the end of 2021. calendar year. Dacian have no net debt in the moment. Exploration has delivered some good results and I have little doubt, that Dacian will be able to extend mine life, which is the key to a higher valuation for the company. I continue to hold a reasonable position in DCN.
Have a nice evening
WS