It was over an hour with alot of questions from analysts. The following things caught my ear - CEO said You will see more this week about Wassa (I expect the new resource statement with an underground resource component). Some discussion on how rediculously undervalued GSS stock is. Excitement aroung the tailings reclaim - now doing 5000 tons/day and have at least 5 years left about 9 Million more tons. Feeling confident about coming two years, they have clarity and simplicity to the plan. All decisions going forward focusing on EBIDA maximization. Lots of questions on sustaining capital levels going forward.
My personal opinion - I have never seen GSS provide this much detail and clarity on their future operating plans. It is a good indication they have their act together and are focused on execution. If gold moves up at some point in the next 6 months the stock might see some very big gains very quickly.
Great Q no question about it. Everything looking very solid now operationally, and I don't say that lightly, having watched the operational problems for the last decade. Tailings reclaim really helping to reduce costs at B-P, it is a very nice low cost option with the drop in gold price and it can keep going for 5 more years. B-P stripping ratio now starting to decline and gold and grades will start to increase for the next 2 years. B-P is in very good shape. Wassa new main pit starting to come along so they can reduce their near term reliance on FB pit. They need to do a push back to extend the FB pit mine life.
Overall, they are in excellent position for the next couple of years AND have Prestea South lining up for even more gold in 2015. Manpon and Dumasi are lined up after that for another 3-5 years. Meanwhile, they can start planning for the Prestea and Wassa underground with any decent recovery in the price of gold.
A nice upward revision on total production in 2013 in this press release, but it seems like they could also see further production increases in 2014 (B-P done stripping, full year of tailings reclaim) and 2015 (Prestea South added) as well, which would lead to even further cost reductions.
All for 50 cents. We maybe more after today's open, and maybe less given they way gold stocks are treated by the market these days.
P South - ~500K ounces grade around 2.8 if I remember right. 200K or so is oxide cap for the oxide plant. They haven't drilled there in a long time so there is probably more than that. Flip side is there is a lot of local illegal mining in that area so perhaps 30K of ounces have been taken by the Galamse. Cost to build road is about 5- 8 million. LOM is relative, since they are good to go in 2014 with the cutbacks at existing pits, and are preping Dumasi (1 Million ounces) for 2015+, and Mampon (250K ounces @ 4.56 ounces) for 2016+ as a high grade kicker to Dumasi. So P South main value is to improve grade and cash flow at oxide mill from the oxide CAP in conjunction with the tailings reclaim. Definitely a very cheap ounce addition with additional flexability.
Cash on hand was up by 15 million - but 10 million is from the loan (it was a 50 million loan and now 40 million left outstanding). Still, that is VERY positive news during a quarter where they are still pre-stripping the B-P Pits and gold prices we as low as 1300 dollars.
The tailings in the oxide plant is nice little free cash flow cow (well, maybe a calf) for the Oxide plant.
Also, if anybody listened to the DGF presentation, they will get Prestea south permit this year. Only been waiting for 5 years.