Here Some Facts About GPL's 2Q
There is a lot being said about GPL right now and the purpose of this post is to clear some things up. After listening to the conference call, my long position in GPL remains unchanged... although, I must admit there ARE some things to take note of... in particular, the higher cash costs at Topia (see #3).
***1) Inventory Issues - well, it was obviously the problem here. But it's important to note that the silver not sold in Q2 from Guanajuato will count for Q3 and Q4. Therefore that silver could possibly be sold at higher silver prices.
"So, of course, what that means for our revenues for Q3 and Q4, is that they will be higher than they normally would be..." Robert Archer in the Q2 conference call.
Revenue should have been approx. $18 million. instead of the 8 1/2 that was recorded.
"The company has made arrangements with another mexiacan producer to accept Guanajuato shipments going forward, with the next shipments going out next week."
"We expect to be down to a zero balance by the end of the year," Archer said.
2) "This does not effect production in any way." Fact. Though the lower grades led to lower production.
3) Higher Cast Costs: Guanajuato - down slightly to $6.32 per silver ounce.
Topia - Unforunately, costs were up significantly to $16.18 per silver ounce.
Due to combination of higher tons milled and overall higher costs.
4) The recovery stays at excellent levels (90 percent mark) though at lower grades. As grades improve, recovery's will improve in the next quarters.
5) Someone mentioned that Kaare Foy recently sold their entire stake in the company. I am not positive on this and need to check.
6) "Pump and Dump" accusations - there was an accusation that GPL hired a person to do that. Where is the proof of that? I'm not denying that it's possible that person did it, but to say the company hired that person, is libel. They could have been hired by anyone...
Looking forward to 3Q - hoping this was just a small bump in the road. Long GPL.