PNR delivered a weaker December Q with 9.4koz production at an AISC of $2,014/oz (vs Sept Q of 10.6koz @ $1,526/oz). The result was below expectations, largely as a result of mineralised zones in the Anderson Lode having shorter strike length and lower grade than modelled. In addition, the Wagtail open pit was completed during the Q, which performed below expectations which was flagged in the Sept Q. Nicolsons was effectively cashflow neutral for the Q. Processing throughput improved +8% and recoveries by +3%, albeit against a 20% lower grade. Approvals to re-enter the OK Decline at Norseman have been received with drilling set to start on the historic high-grade resource due to commence in the March Q. Overall, the review to optimise production at Nicolsons is bearing fruit with improved plant throughput and recoveries, however the erratic nature of narrow vein orebodies impacted production, which we feel could be mitigated with additional drilling. In the background, Norseman is building its inventory with the major drillout of the central areas by mid-2020. We retain our HOLD recommendation and target price of 0.21ps (prior $0.22ps)
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