DCN reported March Q production of 35koz Au at an AISC of $1,488/oz. Production was below forecast guidance of 36-38koz, and costs were at the upper end of DCN’s range of $1,400-$1,500/oz. The production miss came as a result of underperformance of a high-grade stoping block at Beresford North which resulted in a ~1koz lower production than forecast. In reality, DCN is still ramping up to full production rates. The June Q will see the culmination of two high grade areas at the Cornwall Shear Zone (CSZ) and Allanson underground. We see the potential to outperform, however we temper our expectations given the recent issues with availability and now underperformance of one of the Beresford stopes. Arguably, this has been offset by strongly increased output from underground mining, which has been a necessity against the lower grade profile in the March Q. We model a more conservative June Q forecasting production at the lower end of DCN’s stated guidance. BUY maintained and target price of $3.10ps (prior $3.19)

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