DCN has announced a guidance downgrade for its Mt Morgans operation in Western Australia. Underground equipment availability was blamed for the poor performance. All-in sustaining costs (AISC) for the March Q are expected to be in the range of A$1,400-$1,500/oz. Equipment availability issues have been resolved and production is expected to rebound to 50-55koz at an AISC of $1,050-1,150/oz in the June Q. DCN remains a positive development story trading on cheap metrics, but investors will remain cautious until Mt Morgans three main production fronts are fully operational, running unencumbered and at steady state. We model a more conservative stance heading into the June Q forecasting production at the lower end of DCN’s stated June Q guidance. BUY recommendation maintained and target price of $3.19ps (prior $3.35)

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