Dear Icon, I really admire your energy in analysing in details the mining of ores, a bit like reverse engineering, must be fun in the process huh? I think at the end of the day u would become half a gold mining expert.

From what you just commented (on 15:22) "logically, only a fool will let go of such a high quality mine to Borneo Oil for a song That is too good to be true" ,
I think you are starting to get a clearer picture. I will not be surprised if one day you may conclude that not all the Bornoil gold inventory is produced by them.

Of course, at this juncture, I do not expect you to concur with me that Bornoil buy gold.

Just to discuss with you a piece of info that I think worth a look. Bornoil's Cash and bank balances as at 31.10.2015, stand at about 122 million. That is nice enough to buy about 500+kg of pure gold:-

500kg x US$40,000 x RM4.2 = 84 million ringgit

If Bornoil really buy the 500+kg gold, I will expect in the coming qtr report, most of the cash as at 31.10.2015 will be "kaboom" and just go into inventory.

Is it just a coincidence or am I reading too much? I think the coming qtr report will tell. Let us wait and see.

Dear Icon, as you just said "We are having a healthy discussion here" but then why you almost immediately turn around and say want to diok here diok there, very intimidating leh.

For discussion sake (so my dear Icon please do not get excited again) even if Bornoil bought most of their gold inventory, it is not all negative. Just imagine if the gold prices keep trend up and by the end of the year Borinoil sell the 500+ kg gold inventory for 30% trading gain, can u imagine how huge the profit they can bring to the company? furthermore it is without operating expenses and no need to pay any royalties as in the case of mined gold.

On the matter of the coming qtr, my humble view is that if Bornoil do not sell the 500+ gold inventory, u will not see any any significant financial data in the report in relation to the gold.

Again my dear Icon, I am not here to go against u, I just want to figure out the actual picture, just like many of the members here do (I believe). Have a Good day.

Thank you soojinhou to let us know about CNMC Goldmine listed in SGX, as it can help us to compare CNMC and Bornoil production of gold dore.

The profitable CNBC produce as much as 4,356.47 ounces of gold dore bars for the month of June 2014 ( http://aseanequities.com/listconews/cnmc-goldmine-sets-monthly-production-record-june-2014/ )
The same article also said that "A gold dore bar is a crude bullion produced onsite and then sent to refineries to refine to commercial grade gold bullion"

Our Bornoil pale in comparison as it produced only a tiny 95 ounces of gold dore for Jan 2015.
( http://www.bursamalaysia.com/market/listed-companies/company-announcements/5012021 )

From April 15 to Jan 16 our Bornoil only produce a total of about 900 ounces of gold dore (less than CNMC one month of gold dore production !!)

Yet with that relative low production of gold dore, our Bornoil can have a pure gold inventory of 544.58 kg (17,507 ounces) as at Jan 2016 while CNMC, with their much higher production of gold dore, produced Record of only 31,205.85 Ounces (884 kg) of fine gold for the WHOLE YEAR of 2015.

(please see http://infopub.sgx.com/SitePages/CorpAnnouncementDetails.aspx?A=COW_CorpAnnouncement_Content&B=AnnouncementLast1stYear&F=D2BJHDP5BGRZ6WME&H=08ec18dd9857da46810c124068781a25106326b96299cb518a28f8be685f7345

if got error please see SGX general page http://www.sgx.com/wps/portal/sgxweb/home/search )

So within a short span of only 2 months, our Bornoil gold inventory balloon to about 56% of CNMC 2015 WHOLE YEAR production of fine gold ( 17,507 ounces / 31,205 ounces ) !

So how is it possible that our Bornoil can produce so much pure gold when their total gold dore production from April 15 to Jan 16 of about 900 ounces is even less than CNMC 1 month gold dore production (4,356 ounces for Jun 2014) ?

The only answer I can propose is that most of the Bornoil gold inventory is not produced by them. Then where did Bornoil get the gold? My only guess is that they buy the gold (as my uncreative mind cannot think of anything else).

If our Bornoil freshie mining segment is really that geng that they can in a span of 2 months produced pure gold up to 56% of the experienced CNMC WHOLE YEAR production, I think if the CNMC shareholders know about Bornoil, I believe they will all jump ship to Bornoil :).

Though discussion about how much gold bornoil can produce based on the amount of ores mined is interesting and enlightening, it did not lead to anything concrete.

To make things simple, why not just refer to the readily available FACT: the monthly gold dore produced in the production summary.

From April 2015 to Jan 2016, bornoil produce only a total of about 26 kg of gold dore.

If you agree with me that 999.9 gold is only produced from gold dore (pls see https://www.youtube.com/watch?v=_feJwOwsCzc )
then Bornoil can produce at most up to 26 kg of pure gold to date. So why their gold inventory can stand at 500+kg as at Jan 2016? Sorry to say my simple mind only tell me they buy gold.

Before my respected Icon and Yolo get worked up again and promise to tiok/tok in disagreement, please ponder the below point:

Bornoil only start to venture into gold industry last year (see Raymond Teo comment in www.theborneopost.com/2016/02/29/gold-prices-to-continue-upward-trend-experts/ )
and base on bornoil gold inventory on April 2015, it was a massive 191.28 kg !!

If you opine that bornoil gold inventory must be gold produced by them, then isn't it way too fast, if not a miracle, that bornoil can produce 191.28 kg of pure gold almost as soon as they get into the gold industry?

Please enlighten me if you disagree, thank you and hope no tiok/tok.

I believe the below youtube might clarify the issue of gold dore. (from 6.00 minute onward)

https://www.youtube.com/watch?v=_feJwOwsCzc

As said in the youtube, pure gold bullion is extracted from gold dore at gold refinery.

So if bornoil can only produce 2 to 3 kg of gold dore per month, it is not possible for them to produce more than 2 or 3 kg of pure gold per month.

Hence may I be so bold to conclude that the bornoil gold inventory of 500+kg is not produced by them but rather purchased by them for trading gain.

based on available production summary, the monthly gold dore produced is as below:

4/15 1.08 kg
5/15 1.36 kg
6/15 2.69 kg
7/15 4.81 kg
8/15 3.17 kg
9/15 2.22 kg
10/15 2.55 kg
11/15 2.96 kg
12/15 2.23 kg
1/16 2.96 kg

If the gold dore produced is only about 2 to 3 kg per month, and we expect they extract the 999.9 gold form these gold dore. If so, then how can they produce more than 2 or 3 kg of 999.9 gold from these gold dore ?
Unless they can mine out 999.9 gold fresh from the ground without impurity, which I doubt so.

So the only explanation that the gold inventory can stand as high is 544.58 kg as at Jan 2016 is that they mostly purchased (not mined) the gold, for trading gain, as it is expected gold price will trend up.

Please correct me if I am wrong.

so is the gold inventory mostly gold purchased for trading gain?

If they can make pretty good profit by mining just 50kg of gold per month, why they did not make any significant profit when they sold the 191.28kg gold inventory by Aug 2015?

Is it possible that the gold inventory is mostly gold PURCHASED for trading gain, otherwise how is it possible to produce > 100kg of near pure gold from only about 2kg of gold gore produced.

From another view, please note the earlier gold inventory:-

April'15 191.28 kg
May'15 178.5 kg
Jun'15 178.kg
Jul'15 98.5 kg
Aug'15 0 Kg !!
Sept'15 0 kg !!

so they must have sold the 191.28 kg of gold inventory (should worth > RM20 million) by Aug'15.

If they have produced the 191.28 kg sold, why the profit did not show up in the 2nd Qtr and 3rd Qtr report?