Annual report / MailAnnual out and nit looking too bad....
- Paca drilling re-directed to Pulacyo
- Pulacayo drilling finished by the end of June
- net working capital as per 30/6/2008 about 1.6mln$
- La Solucion roughly CF-neutral in FY 2007/08
- overhead costs cut to 70k$ per month (expected for next quarters as well)
- at 70k cash burn p.m. , no drilling funds will take us for at least 6 months
Mail from David (received yesterday)
The resource as published includes all material above the cut off grades for a combined open pit and or underground operation and as such it is not a resource that has been optimized for mining etc. This is why we included the last figure in the release where we try to demonstrate in a development plan there is a very significant portion of the deposit that will have a higher grade and will average more than 300 g/t Ag eq. The next stage will be part of the scoping process where we will look at this sort of potential with proposed mining outlines overlain on the resource. These outlines will likely exclude some of the lower grade, and focus on higher grade areas early in a potential operating schedule. The other important thing is that based on underground mining costs in Bolivia an ore that is approx. 150 g/t silver equivalent should have a reasonable margin, particularly if existing underground workings are available.
Even at these prices an operation, focused on high grade material should be reasonably robust. As prices have fallen, so have costs, for example we have seen quotes for zinc and lead concentrate treatment charges at just above $200/t where as in July/August the rate peaked as high as $550/t. The parameters that Micon used are reasonably conservative, and based on economic cut off grades. We have not mixed sulphide and oxidized mineralization which is commonly being done by some other companies to expand the silver ounces, etc. This deposit will grow, but we will look at options to get some production going with what we have outlined to date first.
Dave