RE:RE:RE:RE:RE:Letter to Mr Ovsenek...I don't know a everything about goldm mining, but I know a few things and I have to say that your understanding of gold mining is wrong, sorry. I will try to explain.
Your last question first. The pre production ounces count against costs to build the mine and the processing plant. Those ounces go towards start up and tune up if you like. They are accounted for differently than present ounces are. Those ounces have been sold. The mine was not in production until July 1st. The trigger event was I believe production of 80% or 87% something like that.
Yes, definitely there are inventories of $31,918,(000). Those ounces are stuck for the present in the circuit. Ten years from now or eighteen years what ever when the mine finally shuts down, those ounces will be recovered. They might also be recovered when a major shut down occurs. They are not dore bars which could have easily been sold. To recover those ounces Pretium would have to shut the plant down and clean up the circuit. That is not a profitable way to operate.
The ounces in inventory are indeed shown in the financial statements. They are inventory. Like I said shut the plant down drain the circuits. Strip the gold out. The gold is there. You can't do that though and keep running the plant at 3,400 tonnes per day. Its an either keep running or shut the plant down. which do you prefer? If we keep the plant running we have more cash from operations.
We do know that the average head grade was 10.5 grams per tonne. This is an average of some rather poor grades along with some better grades. In July 83,667 tonnes of ore produced 16,882 ounces. This works out to about 6.28 g/tonne. At hte end of the 3rd quarter 261,262 tonnes were proced. Subtract the 83,667 tonnes produced in July gives 177,595 tonne. Subtract the ounces for the quarter 82,203-16,882 leaves 65,321 oz. multiply by 31.1034 gives 2,031,705 grams. Divide by 177,595 gives 11.44 grams per tonne.
Lets project this rate going forward. It may not be perfectly accurate but it gives an idea. Let us pretend to operate at 3,400 tonnes per day. At 3,400 T/d 365 days per year Pretium will produce 459,239 ounces each year at the 11.51 g/T. Hopefully that is the worst case senario.
Proven and probable reserves stand at 15.6 million tonnes grading 16.1 grams per tonne. If these reserves provew to be true Pretium could produce 642,377 oz. per year at the higher rate.
B&D