Beadell Resources Reports Bleak Quarterly Performance 

Gold Mining

Beadell Resources’ stock plunged in early trade today after the company announced a 15% decline in gold sales for the December 2018 quarter compared to the previous corresponding period. The stock price dipped by 1.754% to trade at $0.056 on 29 January 2019 (1:13 PM AEST) and finally settling flat at A$0.57 by end of the trading session.

On Tuesday, the gold producer Beadell Resources Limited (ASX: BDR) released its quarterly report for the three months ended 31 December 2018. The company announced that its gold sales and gold production declined by 15% and 11% to 38,422 ounces and 43,365 ounces respectively when compared to the December 2017 quarter. However, compared to the September 2018 quarter, the company has reported 39% growth in gold sales and 45% in gold recovered during the quarter. 

Beadell’s Gold production for the CY2018 totaled 123,296 ounces, 1.3% below the low end of its revised guidance of 125,000-135,000 ounces and 5% less over the CY2017’s production. The company explained that this reduction in gold production is directly attributable to the delay in completion of the Tucano Plant Upgrade Project which restricted processing of higher volumes of sulphide ore. Tucano was completed and commissioned in November 2018 and the company eyes 2019 as a pivotal year for Tucano.

Dr. Nicole Adshead-Bell, CEO & Managing Director of Beadell stated Beadell had laid a strong foundation for Tucano’s future, which requires additional investment to manage our working capital deficit, debt repayment schedule and a 2019 mine plan that delivers ~64% of forecast annual gold production in the second half of the year.

On the cost front, the company achieved All-in Sustaining Costs of US$893 per ounce during the December 2018 quarter, representing a decrease of 4% compared to the same quarter in 2017 and a decrease of 7% compared to the September 2018 quarter. Moreover, the company sold during the period at an average cash price received of US$1,221 per ounce.

During the quarter the company also received approval from the Supreme Court of Western Australia to go ahead with the offer of Great Panther to acquire Beadell by convening Beadell’s shareholders’ meeting and the issue of scheme booklet for the same.

Beadell management believes that a combination with Great Panther Silver Limited offers significant benefits and synergies as its management team has the Brazilian operating experience and Great Panther has the balance sheet strength to support Tucano’s transition to a fully optimized gold mine.

Outlook

The company forecasts Tucano to produce between 145,000 and 155,000 ounces of gold in CY2019 with ~18% of gold production forecast for each of the March and June quarters, 23% in the September quarter and 41% in the December quarter.

AISC is forecasted to be in the range of US$1,000 to US$1,100 per ounce based on a gold price of US$1,275 per ounce and the Brazilian Central Bank 2019 US USD/BRL forecast of 3.62.

Beadell’s cash and bullion as at 31 December 2018 was A$17.4 million.

BDR stock price has fallen 69.19% over the past 12 months despite a positive price movement of 26.67% seen in the last month.


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