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Aurcana keeps pushing back when ramp up will be complete at Shafter. Aurcana also seems to need more cash then expected.
According to my notes, Shafter was supposed to be up to 1500 tpd by the end of Q2 in 2013. Aurcana guided to end of 2013 and subsequently 1Q2014. In your interview today, the CEO is now guiding full ramp up to 2Q.
No position in Aurcana.
It’s a business. Things don’t go to schedule, almost by definition.
Mining is a very difficult business because every deposits is custom made into a mine. Consequently, it is very rare that miners do anything on time and on budget. This is obvious to people who follow the mining sector. However there are many investors who are used to investing in non-mining companies and they are very quick to point out when the management misses guidance. As you know I own several miners and they never get anything done on time. Never. So as an investors you have two choices:
1. You can bitch and cry all you want
2. Buy the shares from the ones who bitch and cry
I realize things don’t always go as planned. But then every other post there is a post from you complaining on the valuation of Aurcana or Veris. Veris since April 2010 has been saying they will get to 150,000 oz of production…. guess why Veris is down 90%+ since then (and also guided to a cash cost of 450)
I’m not trying to be critical of you. I want to have a real discussion of valuation and realistic expectations. I just don’t see that here. At least with Aurcana (unlike Veris) I can see buying, but I’m holding off for a higher margin of safety. I have only been following Aurcana recently (and missed a buying chance in the sell off in July) but am looking to buy in the 1.30 range.
I would ask tougher questions to the CEO. Nobody likes asking these tough questions, but it has to be asked when there has been disappointment after disappointment.
You (CEO) spoke of production being fully ramped up by 2Q 2014. What gives you confidence that your guidance will be achieved? Is there any other machinery/equipment that needs to be purchased? What is the timeline for any additional purchases, machinery that is currently being in transport, or being tested at the site.
I appreciate that you are not trying to be critical but with full honesty, I simply do not have energy for talking to you about the miners. You do not see what I see so there is no point. If you do not see value in Veris, you will not see value in Aurcana.
They’ve been at 150k run rate since May/June? And the gold price crashed between 2010 and now. And they’re a turnaround. And the whole junior miner market has cratered. Yeah, in an ideal world they “missed guidance” but we don’t live in such a world. They’re a value now, that’s all that matters.
Dave, Yes they got to 150k run rate in May/June but it was 3 years later. There was incredible dilution and a huge amount of debt (maybe 100M in debt but not going to waste my time to get an exact amount). Cash costs (guided) have also doubled since then. If you look at actuals (although this qtr should be better, the question is how much better) it is triple. I realize that Veris can’t control cost of diesel which is a high input cost.
Mariusz, fair enough. I will state in another way. I do see value in many scenarios, however I also see risk and not enough margin of safety (yet). I will post if I buy Aurcana in the future. I see the results reported today and the street likes them. I need to still go through them and update my spreadsheets, Congrats on the nice bounce today.
Shafter mill shut down til end of Q4 2013 while they wait for fabricated parts to be made…hopefully this doesn’t turn into another Veris.
Ryan – This was one of the points I was trying to make in my comments above. If the harder questions were asked (I don’t like asking them either) maybe investors might have avoided rallying the stock above 2 just to see it back to where it almost started.
In my view, the interview with the CEO ended up being a disservice to readers of the blog. Again, I am not trying to be critical but rather be intellectually honest.
No position in Aurcana, still trying to buy at lower prices and have a margin of safety.
Do me a favor. Don’t come back to this blog. You have zero understanding of what the mining business is like. I said hundreds of times that miners never get anything done on time, on budget, or without problems. Yet, you still do not understand this. What will it take for you to get this basic concept. Do I need to say it a thousand times? Do I need to write a separate post about it? Do I need to send you a postcard with this message? Or do I need to write it on your forehead?
You should want an open dialogue between bulls and bears. I don’t really understand why you asked me to not post here. I came back to write that I started buying/nibbling on Aurcana (AUN.v). Could it go lower? Yes, but I now see the risks/rewards lining up in my favor.
At the current price, this is definitely a nice entry.
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