Why did the Dacian Gold (ASX:DCN) share price fall on Friday?

It wasn’t a golden quarter for Dacian.
The post Why did the Dacian Gold (ASX:DCN) share price fall on Friday? appeared first on The Motley Fool Australia. –

Shares in gold mining company Dacian Gold Ltd (ASX: DCN) lost ground on Friday to close 4% lower at 22.5 cents apiece.

Dacian shares were on the move today after the company released its quarterly earnings and activities report.

Here are the details.

Dacian share price slides as production in line with guidance

Dacian outlined a number of investment highlights from the quarter, including:

September quarter production of 15,819oz, in line with 2H weighted guidance, but down 38% quarter on quarter.
All-in sustaining cost (AISC) of $2,362/oz, up from $1,742/ounce from last quarter
Cash and gold on hand at 30 September 2021 of $33.2 million, 38% behind the quarter prior
Total debt of $16.0 million following refinancing of project debt facility
Total forward hedge position reduced to 13,410oz at an average gold price of $2,236/oz

What happened this quarter for Dacian Gold?

Although the company came in with gold production that was largely in line with guidance for its second half, “September quarter production was slightly lower than planned”.

In fact, total production came in around 40% behind the previous quarter at almost 15,820 ounces, down from 25,558 ounces.

Dacian also realised these gold sales on an AISC of $2,362, a 36% increase from last quarter. The company explained that the higher AISC came from the “lower production for the quarter, and is forecast to reduce in line with the increasing production for the remainder of the financial year”.

The company wasn’t immune to the effects of the pandemic either, as ‘labour scarcity’ had an impact on its open-pit mining rates.

It also had an effect on the recently appointed underground mining contractor’s workforce, thereby hindering operations this quarter.

Aside from this, the company milled a total of 686,671 tonnes of ore at an average feed grade of 0.79g/t gold, containing 17,343 ounces.

Dacian also left the quarter with cash and gold bullion on hand of $33.2 million, which is a 21% decrease from last quarter’s balance of $41.8 million.

What did management say?

Speaking on the announcement, Dacian managing director Leigh Junk said:

The tight labour market conditions continue to be a headwind for the Western Australian mining industry including our operations, however despite challenges our plan for the full year remains achievable. Our ongoing exploration investment is demonstrating the prospectivity of our land position with the recent success beneath the Jupiter open pit highlighting the potential for growth to our operations.

What’s next for Dacian Gold

Production guidance of FY22 is for 100,000–110,000 ounces, on an AISC of $1,550–$1,7000 per ounce.

The company notes that “as previously guided, production remains weighed to the 2H of FY22”

FY22 also is set to see a “tiered quarter on quarter production profile over the financial year due to accessing significant ore from the shallow dipping Cornwall Shear Zone” at its Doublejay open-pit mine.

In addition, the final stage of development at Doublejay continues, “producing high-grade ore in earnest during FY2023–FY2024”

It’s been more than a difficult year to date for the Dacian Gold share price, having posted a loss of over 45% since January 1.

This extends its loss over the last 12 months to 37%, well behind the benchmark S&P/AX 200 index (ASX: XJO)’s return of around 25% in the same time.

The post Why did the Dacian Gold (ASX:DCN) share price fall on Friday? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Dacian Gold right now?

Before you consider Dacian Gold, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Dacian Gold wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why the Dacian Gold (ASX:DCN) share price is leaping 9% today

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!