High Grade Section ReachedThese words sound promising: "improved head grades in material from the Company-operated area within the Providencia mine where development activity has reached an expected high grade section of the resource."
The company operated area had a head grade of around 4 g/t, while the contracted mining was over 20 g/t.
If the company operated area has reached a high grade section as the news release states, then that means the 4 g/t will become higher.
I was wondering why the company operated area had a much lower grade than the contract area. It sounds like they were just mining through lower grade material until the higher grade was reached. If the lower grade 4 g/t they were mining increases to their average reserve grade, that would increase production and lower cost. As well, company operated mining would have lower cost than contracted mining.
From the filing, the number of tonnes milled from company operated mines was near equal to the number of tonnes milled from contract mining. But the number of oz produced was much lower from company operated because their grade was a much lower 4 g/t. This news of reaching a high grade area could mean a significant improvement to company operated production.