If it it is $0.50/lb in Q3, then it will be less in Q4, and approaching zero or negative in 2015. A spike in gold price would be gravy!!!
The $1.00/lb low end of guidance was for FY2014. I recall seeing a figure of $1.33/lb for H1 2014. So what does this mean for Q3 and Q4 with higher gold grades, higher gold recovery, and higher overall tonnages? Ultra mentions $0.25/lb, but I do not know the context of his number.
Ultra….are you assuming they continue to produce from the higher gold grade ore in conjunction with lower operating costs to attain the $0.00 cost per pound Cu? How much higher grade ore is there?
I tend to agree with Ultra. Moly futures are not a good indicator of future moly prices. There are too many events which have significant effects on moly prices which cannot be predicted. For example, the futures market did not anticipate the tightness in moly supply in early 2014 and moly price sky-rocketted to $15. And the futures market did not anticipate the recent influx of Asian moly and the subsequent crash in Moly price. JMO.
I do not think there is any large vote moly forecasting tools.
So in Dec 2015, they call the $200 million dollar bond, would they then refinance with a lower bond or get a revolving line of credit? The latter would be more beneficial…right? Anyone has an estimate of cash on hand before they call the bonds?
Ultra, I hope you are right.
LONDON Asian Metal 3 Oct 14 - European molybdenum oxide 57%min powder prices have fallen by around USD1.00lb since Monday to range between USD9.90-10.10lb in warehouse Rotterdam on Thursday, only USD0.30-0.40lb above current year lows of USD9.50lb in warehouse Rotterdam seen in Q1 2014.
Perron would need big balls to proceed with stripping at TC mines in today's environment. The landscape may improve as you predict, and Perron can reassess the situation.
The relentless and ongoing fall in moly price, combined with uncertain future global economic growth, and known huge increase in moly supply in the coming years is not an environment to proceed with stripping at TC mine. Perron is correct to put TC mine in C&M. Perron can always start stripping at a later date if conditions change.
Moly price got clobbered again today. Time will tell if Perron's decision to put TC on C&M was the correct move. In the mean time, Perron better get the most out of Milligan. I believe he will.
Investors were hoping the higher moly price (to $15) would lead to a positive, quick decision on TC mine. Now that moly prices has soften significantly ($11), all bets are off for the time being. Just my thoughts.
The $248 million dollar was based on the updated 2014 guidance of 190,000 oz of gold and 70 million pounds of copper (page 20 of September presentation). I assumed the Milligan cost was the revenue from the gold sales plus a cost of $1.25//pound of copper produced. With gold sales at $1290 plus Royal Golds share at $435, I get $248 million.
Gold revenue=91,346*1290+98653*435= $160.75 million
Net copper cost = 70,000,000*$1.25 = $87.5 million
Total cost = 161+87 = $248 million
Ultra, my calculation of MM cash cost for 2014 is $248 million based on TC's most recent guidance for 2014.
The cash cost would approach towards the $280 million figure at full production. What are your projected costs if you think the $280 million is "dumb hysteria"?
Moly price dropping, TC on C&M, Gold/copper dropping. Poor communications from management. Mining shares are in disfavour.
Investors see no reason to buy shares now. They appear to be right.
All it will take is a positive development on TC mines, and the momentum will change. Otherwise, more pain.
TC has given enough of their assets to Royal Gold. They do not need to give more away. Need to do a deal with a consortium of steel companies or a trading company to sell discounted moly for some upfront money. Sojitz may be a good candidate. We are not talking huge sums of money, say 50 million dollars.