RE: RE: Remember When... Good Evening, Alternative...
Since selling out of my position back in May, 2011, I have been following LSG very closely.
Simply put...it is going to take execution!
I am concerned about the size of the additional Ball Mill that they purchased in order to bring production at the Bell Creek Mill up to 3,000 Tonnes per day...it is much too big for production limits....in otherwords, it is designed to bring the Bell Creek Mill to 5,500 Tonnes per day but LSG will only be able to supply feed, at best, 3,000 Tonnes per day by the end of December, 2012. In order for equipment and resources to function properly you must operate them at or close to capacity.
I totally understand why they purchased the Mill in the first place...future planning...but..it will increase their production costs relative to the through-put at the Bell Creek Mill and will create problems that will have to be corrected as they put it online and operate it into the future.
Fenn-Gib must be considered future planning and will not represent any value for at least 6 years.
They must get their Timmins Mine Production on track and capacity at the Bell Creek Mill to 3,000 Tonnes per day. Construction at Bell Creek should be completed by the end of the year...However, it will take 2-3 months to Commission the Mill operation to a constant production rate of 3,000 Tonnes per day...fine tune the operation to achieve consistent production rates....that will put them into the Second Quarter of 2012 before they can prove to the marketplace that they can produce. Then and only then will they be rewarded accordingly.
It is going to be a very difficult road for them and Management has lost all credibility. I am not interested in an investment with LSG at this point....there are much more better picks out there at this time with a lot less risk.
I do understand the fustration that Redraider16 has expressed among others...I would consider an investment in LSG if there was a change of Management at the top...Makuch leaving would more than likely spike the price 20-30 percent.
Failure after failure...I cannot believe that he is still there...time to go!
Digger144