Swing....and a Miss! We have a problem here...a "crack" in the storyline!
Something went wrong....it appears to be a "grade" issue.
We do not have all the facts at this point so we must speculate on what the problem is...most likely it is the "feed" coming from the Underground Operations.
Now...if they were able to get enough Tonnage from the Underground Operations to blend in accordingly with the Open Pit Operation...then..the grade from Underground was weak. If they were light in terms of Tonnage from the Underground and the grade was inline then it is not a problem with the grade but a supply issue.
In otherwords... less Tonnage from Underground resulted in them having to feed additional lower grade ore from the Open Pit in order to feed the Processing Mill at about 2,000 Tonnes per Day. However, having said that...we may have a grade problem Underground and the Stopes that they are working in are not producing the grade of ore that is in the Mine Plan.
I am concerned about this and would like to know exactly what went wrong...one thing that is for sure and the Market as Myself has figured this out...it is not a Milling Problem and the lost four days were not an issue of any significance along with the Cone Crusher problem that would result in the miss in terms of gold Production...I will explain why?
First Quarter 2012: Mill Processed 180,965 Tonnes @ 3.04 g/t.....1989 Tonnes per day
Second Quarter 2012: Mill Processed 178,002 tonnes @ 3.30 g/t....1956 Tonnes per day
As we can see the loss production due to the four day Mill shut down and Cone Crusher issue was only 2,963 Tonnes
The Ounce count for the Second Quarter was 18,254 Ounces.
Add in the lost production....2,963 Tonnes @ 3.30 g/t. equals 97,779 grams divided by 31g (Troy Ounce)...gives us 315 Ounces.
18,254 Ounces + 315 Ounces.....Total 18,569 Ounces.
Conclusion: We have a problem!
It was either a shortfall of Tonnage from Underground or a grade problem...or both..not good!
For example: April 2012...they produced 7,088 Ounces at a grade of 3.66 g/t.
Using this grade @ Tonnes Milled for the Second Quarter of 178,002.
We get...178,002 X 3.66 g.t...651,487 grams divided by 31g (troy ounce)
Gives us....21,015 Ounces
Add in Lost Production...2963 tonnes X 3.66 g/t...10,844 divided by 31g
equals....349.80 Ounces
Total Ounces for the Second Quarter: 21,015 + 350....21,365 Ounces
Management has some explaining to do!
Digger144
P.S. I am most definitely disappointed and will have to make a decision either to stay or go!
I want an explanation as soon as possible!