Oromin Explorations Ltd OLEPF

TGZ 2013 grade mined guidance.....

[tony1969]

From TGZ's latest release that can be found on their web site.

2013 GUIDANCE

				Year ending December 31,
				2012	2013
				Actuals	Guidance Range
Operating results
	Ore mined		('000t)	5,915	4,000-4,500
	Waste mined		('000t)	22,962	31,000-32,000
	Total mined		('000t)	28,877	35,000-36,500
	Grade mined		(g/t)	1.98	1.40-1.60
	Strip ratio		waste/ore	3.9	7.00-7.75
	Ore milled		('000t)	2,439	3,300-3,400
	Head grade		(g/t)	3.08	2.00-2.15
	Recovery rate		%	88.7	89.0-91.0
	Gold produced		(oz)	214,310	190,000-210,000
	Gold sold		(oz)	207,814	190,000-210,000
	Total cash cost (incl. royalties) (1)(2)		$/oz sold	627	650-700
	Mining (cost/t mined)			2.71	2.50-2.70
	Milling (cost/t milled)			20.39	19.00-20.00
	G&A (cost/t milled)			6.16	5.00-6.00
Capital Expenditures
	Mine site		$ millions		20.00-25.00
	Capitalized reserve development		$ millions		5.00-10.00
	Gora development costs		$ millions		45.00-50.00
		Mobile equipment	$ millions		30.00-35.00
		Site development	$ millions		15.00-20.00
	Capitalized deferred stripping(2)		$ millions		35.00-40.00
Exploration (expensed)			$ millions		10.00-15.00
Administration expense			$ millions		15.00-20.00
Hedge deliveries			(oz)		59,789

 

Looks like their grade mined for 2013 will range be 20% less (1.60 g/t) to 30% (1.40 g/t) less than the 1.98 g/t they mined in 2012.

 

No offense Tree or EH1 but shouldn't the grade be trending up instead of dramatically down for a company with such optimistic goals? As parks says. How many ways can they spin this?

[MrAnderson]

Can they really expect those costs with a striping ratio going from 3.9 to 7.0 or more?  One has got to belive the coast per oz of gold to climb more.

[tony1969]

MrAnderson TGZ did mention that their processing rates where going to go up by 37% this year resulting in about $35 miilion more in expenses. You do bring up a good point because mining at a higher stripping ratio is less profitable than mining at a lower stripping ratio because more waste must be moved.