Name that peak*:
It was a pleasant day. More Sunday, subbers.
*clue: many mountaineers will recognize it, as it's one of the world's toughest climbs
Name that peak*:
We stockpiled much of our high-grade gold and silver concentrates produced during the quarter in preparation for pouring Doré bars in our new Doré facility, which we began commissioning at the end of the quarter and which increased our unsold inventories. We recorded a $(0.03) per share loss which was contributed by unsold concentrate inventory as a result of stockpiling the high-grade concentrates for the Doré facility process. These inventoried ounces are planned to be processed and sold during the fourth quarter as Doré bars.
AndeanGold Announces Resignation of Executive Officer and Default Status
Vancouver, British Columbia--(Newsfile Corp. - August 4, 2015) - AndeanGold Ltd. (TSXV: AAU) (BVL: AAU) ("the Company" or "AndeanGold") wishes to announce that Mr. David Cross, CGA, has resigned as Chief Financial Officer of the Company effective as of July 27, 2015. AndeanGold would like to thank Mr. Cross for his service to the Company over the past several years.
Further to this matter, the Company also announces that it is now in default of complying with the continuous disclosure filing requirements with respect to its Financial Statements (Part 4 of National Instrument 51-102: Continuous Disclosure Obligations) and its Management Discussion and Analysis (Part 5 of NI 51-102) for the year ended March 31, 2015. The filing of those statements is now expected to take place before September 29, 2015. In the interim, as requested by the Board of Directors of the Company, the British Columbia Securities Commission ("BCSC") has issued a Management Cease-Trade Order ("CTO") dated July 30, 2015. The Company has already commenced the process of identifying and appointing an interim Chief Financial Officer to oversee and complete the final steps in its on-going audit procedure.
About AndeanGold Ltd:
Our operating strategy is to fund ongoing and long-term development with operating cash flows. With limited development spending planned in 2015, the Company expects to use operating cash flows to pay-down a debt obligation coming due on January 31, 2016 and to refinance the balance of the obligation.Here's an idea of the cash they're generating. Forget cockamamey "operating cash flows" and look at the real numbers that are accounting standards, such as operating earnings...
After incorporating first half production results, the Company has revised its targeted 2015 production to 40,000 to 50,000 payable ounces of gold, from both Briggs and Pinson Underground. The consolidated average cash cost of gold is expected to be between $850 and $950 per ounce sold, and the consolidated average all-in sustaining cost (AISC) is expected to be between $950 and $1,050 per ounce sold in 2015.In fact, in the first half of 2015 the average cash cost has been $1,075.50/oz and the AISC has been $1,282/oz. That means to even get down to the top end of the ATN guidance range, they'll have to produce gold at a cash cost of $823.50/oz for the second half of 2015, or the AISC will need to be $813/oz. Why don't you just stencil "Shareholders Are Dumbasses" on my forehead and be done, guys?
2) The gold/silver ratio to stay high, by which we mean 1/70 or above. It can spike down briefly under that along the way, but I don't expect it to trend down meaningfully. When they call silver "the poor man's gold", the real message is "the choice that poor people make". Semi-on-topic, I'd definitely hold gold miner stocks over silver miner stocks this year.
Expansion of Toromocho Postponed3 August 2015
The metallurgical problems that Chinalco faces at Toromocho are coming to an end. The Chinese mining company announced a few days ago that it had reached full production capacity, but the delay of almost 20 months in getting there (the mine was inaugurated in December 2013) has forced it to suspend indefinitely its operation growth project, in which it was going to invest U$1.32Bn.
"The company is losing money. Because of that, it hasn't given us a date for the expansion project", said the Vice Minister of Mines, Guillermo Shinno. The Toromocho expansion project was due to begin its construction in January 2016, according to the chronogram of the Ministry of Energy and Mines (Minem).
The high concentrations of arsenic in the deposit (a penalty mineral for copper refineries) has been the main obstacle for the Chinese mining company. "Chinalco made a bad plan. Its engineers thought that coper mineral with lower levels of arsenic wasn't far from the surface, but in fact it was much lower down", explained the Vice Minister.
From Mining Weekly:
SocGen says miners’ output costs have dropped more than expected
I laughed. Whole thing here.Miners’ output costs have dropped more than industry consensus due to lower energy prices and weak emerging market currencies, a report by Societe Generale showed, suggesting metals prices have further to fall before miners are forced out of business.
How mining companies will react to the new new normal
I've been sent three "stress testing the gold miners" fundamentals analyses published by brokerages this week (the best was from RBC and for what it's worth, Tahoe Resources and Semafo came out best) and I've read at least a dozen "gold miners in trouble at $1,100/oz gold" articles that sometimes take a look, other times are akin to the guy with the "End Of The World" sandwich board on the city street corner. And when those anal ysts have a theme, they're sure to thrash it to death. It's called justifying paychecks. However, one thing I can guarantee in the face of this very important and wholly objective scientific numbercrunching is the reaction from the miners. We're about to hear from a whole bunch of mining executives working at the larger and the medium-scale producers who are going to tell us that in fact things have changed and they're perfectly profitable at U$1,100/oz gold these days, plus how they're "stress tested" down to a thousand and all those suits in cubicles are being overly pessimistic.
What then happens, given a level gold playing field, is that the lapdogs anal ysts writing their pseudocritiques fall into line and start saying nice things about the miners (recall they care more about the people running these mining companies than their brokerage clients), shares recover at least some of the recent losses as bargain hunters move in to snap up the value. That re-rate remains in place right up until they discover that the mining bosses were talking about operating costs and not total costs, or total costs and not all-in sustaining costs, or All-In costs and not all-in sustaining costs. Whichever way it is, the new buyers discover one or two quarters down the line that the money made at the mine is having great difficulty in reaching the bottom line of the P+L. All very strange and perplexing, I'm sure. Unless of course gold recovers in the meantime and then we're all saved. Cynical opening riff complete, I'll now turn the irony spigot towards other targets.
In Phædrus’ “Church of Reason” Lecture In Zen and the Art of Motorcycle Maintenance, Robert Pirsig relates a lecture delivered by his alter-ego, Phædrus. At the time the lecture was written, Phædrus was struggling with a problem he had with his students’ perception of university. The University was at that time in danger of losing its accreditation and students seemed concerned that if it did, the university would cease to exist. The “Church of Reason” lecture was delivered by Phædrus to explain to them the true nature of university. One student remarked that the State Police would move onto campus to prevent the University from losing its accreditation. This made it clear to Phædrus that there was a fundamental misunderstanding of what comprises a University and the lecture was an attempt to explain the proper meaning of ‘University.’ The following is an excerpt from chapter 13 of the book.
The real University, he said, has no specific location. It owns no property, pays no salaries and receives no material dues. The real University is a state of mind. It is that great heritage of rational thought that has been brought down to us through the centuries and which does not exist at any specific location. It’s a state of mind which is regenerated throughout the centuries by a body of people who traditionally carry the title of professor, but even that title is not part of the real University. The real University is nothing less than the continuing body of reason itself.In addition to this state of mind, “reason,” there’s a legal entity which is unfortunately called by the same name but which is quite another thing. This is a nonprofit corporation, a branch of the state with a specific address. It owns property, is capable of paying salaries, of receiving money and of responding to legislative pressures in the process.But this second university, the legal corporation, cannot teach, does not generate new knowledge or evaluate ideas. It is not the real University at all. It is just a church building, the setting, the location at which conditions have been made favorable for the real church to exist.Confusion continually occurs in people who fail to see this difference, he said, and think that control of the church buildings implies control of the church. They see professors as employees of the second university who should abandon reason when told to and take orders with no backtalk, the same way employees do in other corporations.They see the second university, but fail to see the first. (Pirsig, 1999, p. 150).
Phædrus goes on to describe the role of the professor within the University through an analogy of a minister within a church.
After these explanations he returned to the analogy of the religious church. The citizens who build such a church and pay for it probably have in mind that they’re doing this for the community. A good sermon can put the parishioners in a right frame of mind for the coming week. Sunday school will help the children grow up right. The minister who delivers the sermon and directs the Sunday school understands these goals and normally goes along with them, but he also knows that his primary goals are not to serve the community. His primary goal is always to serve God. Normally there’s no conflict but occasionally one creeps in when trustees oppose the minister’s sermons and threaten reduction of funds. That happens.A true minister, in such situations, must act as though he’d never heard the threats. His primary goal isn’t to serve the members of the community, but always god.The primary goal of the Church of Reason, Phaedrus said, is always Socrates’ old goal of truth, in its ever-changing forms, as it’s revealed by the process of rationality. Everything else is subordinate to that. Normally this goal is in no conflict with the location goal of improving citizenry, but on occasion some conflict arises, as in the case of Socrates himself. It arises when trustees and legislators who’ve contributed large amounts of time and money to the location take points of view in opposition to the professors’ lectures of public statements. They can then lean on the administration by threatening to cut off funds if the professors don’t say what they want to hear. That happens too.True churchmen in such situations must act as though they had never heard these threats. Their primary goal never is to serve the community ahead of everything else. Their primary goal is to serve, through reason, the goal of truth. (Pirsig, 1999, p. 151).
All the world's a mine,
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