Mill History ContinuedHi Everyone,
This quarter's report was not the market-changing report we are one day hoping for. You can see the addition to the mill history below.
Whatever it is that is going on with RCT it is important to remember a few things. One is that production is key, even production that is off from previous, similar periods, for whatever reason. Another is the price of gold.
RCT fell of last quarter's gold equivalent ounces produced by 115 ounces. At POG $1200/ounce that's $138k. At POG $1250/ounce that's $143,750, and at POG $1300/ounce that's $149,500 of revenue. To a company that is looking at 8,500 gold equivalent ounces produced annually, (8,500 X $1250 = $10,625,000,) 115 ounces less reduces the revenue by 1.35%. I think, for seemingly so few ounces, that's a large percentage of the revenue, but that's just me.
So what is the impact of more production and a higher price of gold? That's for you to evaluate. What is the future for RCT in all case scenarios? What do you speculate will be RCT's production and the POG in the future?
Well from the Jan 29, 2015 history printed below we can see that RCT is not at full production with the mill expansion yet, even though we thought this would be the quarter it would be… alas… Yet there is still the promise for increased production with better grade yet to come.
As for the POG, it will be what it will be. RCT can send it up for itself, while in reality it stays the same, by reducing it's costs, which are supposed to be lower due to the mill expansion, and there is the external boon of lower fuel costs. However there are other cost influences that are impacting RCT's cost per ounce. Hopefully management gets its costs reduced.
A combined, annual, positive difference of $100 due to an increase in the POG and cost reductions X 8,500 ounces = $850,000. That's an 8% annual increase in revenue, all things being equal.
However, with the potential for better outcomes ahead, RCT cannot go backwards forever. I think RCT really needs to have a stellar quarter now, or its survival is in jeopardy.
In the future RCT could not do better, or they could do better - just depending… These, however are some good things to look at as we anticipate RCT's next report due out the end of April.
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From RCT's MD & A Publications on SEDAR
September 28 2006. …To date the Company has earned a 42.75% interest in the Mina Real Property and is actively engaged with its joint venture partner in the construction of a conventional milling operation with a start-up capacity of at least 200 tonnes/day scheduled for completion in November 2006… Site preparation for a conventional cyanidation processing plant and related infrastructure is substantially completed and the extensive concrete pad system being constructed to accommodate the various components of the mill is nearing completion… Firm contracts for the purchase and delivery of key components of the mill have been placed with suppliers with deliveries scheduled over the coming two months.
October 30 2006. …The plant is scheduled for completion by late November of 2006 and will have an initial start-up capacity of 200 tonnes/day and a design that can be easily upgraded to at least 300 tonnes/day.
Jan 29 2007. …The crushing and grinding section of the mill is now operating at its initial design capacity and feeding the cyanide plant at the rate of 200 tonnes/day. The mill is expected to remain at this level until mid-2007, when an increase in capacity to 300 tonnes/day is contemplated. The modular design of the mill should allow for the planned increase in capacity to be implemented at a cost of under US$300,000. Initial milling operations commenced in January 2007.
Apr 30 2007. …The mill is still in the start-up phase and currently undergoing modifications to allow mill production to approach the initial target of 200 tonnes/day with 80% grind passing 100 mesh and recovery of 90%+ for gold.
Sep 28 2007. …The Mina Real mill is currently in production, processing 200 tonnes/day, and as of the end of August 2007, it is generating positive cash flow from operations. Studies are underway to investigate increasing production up to 300 tonnes/day by early 2008. The Company anticipated that additional financing may be required to adopt a more aggressive exploration program, make capacity and recovery improvements to the mill and related infrastructure, and provide adequate working capital for operations. As a result the Company completed a brokered private placement on October 27, 2007, which raised gross proceeds of $4,000,000 through the issuance of 2,000,000 units at a price of $2.00 per unit (the “Units”).
Oct 30 2007. …Commissioning of the Mina Real mill began in January 2007 and the first gold and silver precipitate was delivered to the refinery in early February. Since May 31, 2007 the mill has been in commercial production and operating in a satisfactory manner with some disruptions in production being experienced. June production was particularly impacted due to down time associated with intermittent power outages being experienced from our primary supplier of electricity. A second back-up power generator has been put into operation which now provides the power capacity to operate when there is disruption in service from the main grid… Further improvements are being implemented to attain more accurate and continuous reconciliation of the throughput tonnage, production, and deliveries to the refinery… Since May 2007, production has ramped up steadily from average production levels of 150 tonnes/day to average levels of about 200 tonnes/day by the end of the first fiscal quarter. The current recovery rate for gold is surpassing 90% and beginning to approach our initial target of 94%. Recovery rates for silver are still averaging between 40% and 60%. Additional metallurgical testing is in process to define the necessary modifications to improve the silver recovery.
Jan 29 2008. …During the three months ended November 30, 2007 production at the mill has been steady with an average throughput of just under 200 tons per day. During periods of scheduled equipment maintenance the throughput is reduced. The Company has planned for an increase in daily throughput from 200 tons per day to between 300 and 350 tons per day. In order to achieve these new levels of production additional crushing and grinding capacity is required. Subsequent to November 30, 2007, the Company ordered a 10 foot X 10 foot Allis Chambers ball mill as well as a Symons 4 1⁄4 standard secondary crusher. This new equipment is scheduled to arrive on site by the end of January 2008. Foundations for the mill and power supply should be completed in late February and this equipment is expected to be operational and on-line in April 2008. The Company plans to increase production up to 300 tons per day by the second quarter of 2008. Most of the equipment and parts have been ordered and the construction program will start in February 2008. The Company believes that it currently has sufficient financial resources to conduct anticipated exploration programs, make capacity and recovery improvements to the mill and related infrastructure and provide adequate working capital for the upcoming year.
Apr 29 2008. …The Company now has an operating mill which is generating cash flow from operations. The Company is also implementing an exploration and development program utilizing funds raised in the capital markets and cash flow from operations to define additional resources and production capabilities. The immediate priority is to conduct sufficient development work to ensure that the ore required to feed the mill at 300 tonnes per day is available with an average head grade of 8.5 grams of gold and 150 grams of silver per tonne. Results in the Florida North area have been positive and the area can be accessed faster in order to provide additional mill feed for the anticipated upgrade to 300 tonnes per day. Work on the plant expansion continued with completion of the foundations for the 10x10 mill, secondary crusher, press filter and air compressors. In addition, conveyor belts, ducts for the crushing and milling area are under construction. To date, 75% of all equipment and materials have been ordered… The 10x10 ball mill was moved to the site and mounted on its foundations. The new liners for the ball mill were ordered and work is ongoing on the installation process.
Sep 29 2008. …The start-up of the new 10x10 ball mill is dependent on increasing production from the mine… At this time the work is substantially complete and there is little left to do before this new ball mill can be brought on line. Work is ongoing at the plant with the installation of the necessary equipment for the production increase to 300 tonnes per day… The new 10 x 10 ball mill has been installed. The only components which have not been received are the new filters and this is expected by early October.
Oct 29 2008. …The production problems we are experiencing are not related to mill operations. In all aspects the mill is achieving all performance parameters. Substantially all of the equipment necessary to increase production to 300 tonnes per day is on site. At this time completion of this capital project is on hold while efforts to improve mine production continue. The time required to complete the remaining work on the mill capacity expansion is expected to be less than one month.
Jan 29 2009. …In regards to the mill it can be stated that the facility, when operating, is functioning in line with design parameters. The poor operating statistics are not the result of the mill not being able to properly process the material which is delivered, but the issue has been having sufficient feed to run the mill at design parameters on a steady state. As a result the mill operated on an intermittent basis during the quarter and the mill was shut down all of December 2008. In early January 2009 the mill resumed operations but not at full 200 tonnes per day capacity. The Company has substantially completed the capital project to expand plant capacity to 300 tonnes per day. Overall the physical work is approximately 80% complete. The budgeted cost to complete the mill expansion project is in the range of US $600,000. Further work on the plant expansion has been deferred so that available resources can be directed towards having the mine produce sufficient ore to feed the mill at 200 tonnes per day. After this is achieved the mill capacity expansion work can be quickly completed. Management has developed a program to realize the full potential of the Mina Real property. Initially, the Company needs to develop sufficient workings so that the mill can process at least 200 tonnes per day with good grade control. With the mill operating on a positive basis, at 200 tonnes per day and gradually increasing to 300 tonnes per day, then the development of other areas of interest with a diamond drilling and expanded drift development programs can continue. The key to being able to implement this program is having sufficient capital at the appropriate time.
Apr 29 2009. …The poor operating statistics are not the result of the mill not being able to properly process the material which is delivered, but the issue has been having sufficient feed to run the mill at design parameters on a steady state. As a result the mill operated on an intermittent basis during the previous quarter and the mill was shut down all of December 2008.Work on the plant expansion has been deferred pending completion of additional financing. The cost to complete the expansion is estimated at US $530,000 with the largest single item being mill liner costs of about US $150,000. The balance of the budget is related to piping and electrical materials.
Sep 28 2009. …The Company continues to work on increasing production capacity to 300 tonnes per day at the plant and construction is 90% complete at this time; what remains is the installation of the 10 x10 ball mill along with minimal side works. Additional funding will be needed in order to complete the installation and once received it is expected that this final work will be completed immediately.
Oct 30 2009. …Production during the three months ended August 31, 2009 was negatively impacted due to the lack of necessary capital to put in place the required work programs to increase production and add to the material which can be processed through the mill. Operations have been limited to the work which could be funded with the available resources. The Company is working to complete a financing which will provide the necessary working capital to implement the programs to improve production and advance the development of new production areas. The mill expansion, to 300 tonnes per day production capacity, is complete other than the acquisition and installation of liners for the new ball mill, which will be purchased once financing is completed.
Jan 28 2010. …There was intermittent operation of the mill during Q2, as the Company’s lack of financial resources limited its ability to conduct ongoing maintenance and upgrades to the mill and tailings facilities. The Company is ready to restart the mill capacity increase project (to 300 tpd). The 10’ x 10’ ball mill is already set in its foundation and will be connected. The other mills will be left there as back-up. Another tank needed for the chemical treatment will be installed and, with these elements, the plant throughput will be 300 tpd.
Apr 29 2010. …Initial milling operations commenced in January 2007 with the commissioning process being completed by May 31, 2007. The Company, in a very compressed time frame, acquired, developed and brought into production a gold property in Mexico… Several modifications and improvements of the milling process were completed during the reported quarter… GRINDING: New liners were installed in the 6' x 5' and 6' x 12' mills during the first and second week of December... Work to increase mill capacity to 300 tpd is now ongoing.
Sep 28 2010. …Feed to 6’ x 5’ and 6’ x 12’ mills was modified to improve load to the mills... Equipment Acquired to Increase Capacity to 300 Tpd: (1.) One Allis Chalmers 10’ x 10’ mill. (2.) Four D-20 Krebbs type Hydrocyclons , including materials for classification and cyclone tower. (3.) Four SRL 5” x 4” Denver type pumps and mill discharge box. (4.) Piping and connectors. (5.) Fabrication and installation of one 30 ft diameter, 21 ft height agitator tank. (6). Acquisition of five mechanisms for the thickening tanks. The previously existing mechanisms were not adequate to the process requirements. (7.) Materials for aisles and bridges… Subsequent to year end work to increase plant capacity to 300 tpd and modifications to improve several areas continued. Foundation for the 10' x 10' mill completed and the mill was installed at its final location and its liners installed. The electric installation is in process and tests will start soon. Cyclone tower assembling and installation was completed. Structure for the mill feed belt was installed.
Oct 29 2010. …Operations at the mines and projects were severely impaired by the very heavy rains experienced in July 2010. Mills at the plant were stopped for 13 days due to lack of mineralized material. Roads and mine yards were rehabilitated during July and August 2010. Mill Area: Upgrading and new construction, including the capacity expansion project were continued at the plant. The crown of the 10' x 10' mill was radially and axially aligned. The pinion, reducer and motor were installed. Operation aisles of all milling area were built. Feed belt was vulcanized and feed bin was installed. Ball bearing lube system box was built. Cyclone piping was installed. Vacuum testing is to be performed in October 2010.
Jan 31 2011. …mechanical problems in the 6’ x 12’ mill. Upgrading and new construction, including the capacity expansion project were continued at the plant. The 10’ x 10’ mill installation was completed and tests were done. Due to some abnormalities in the operation, some mechanical pieces will be fabricated and added. This project will take 10 weeks.
Apr 28 2011. …Some works were performed for the expansion to 300 tpd and the remodeling of the mill. The advances were as follows: Crushing A 5’ x 12’ screen is sent to a vendor to quote its repair. Also, plates, links and bolts will be manufactured for the rehabilitation of the feeder instead of buying a new one.
Milling Some tests were made with the mill 10’ x10’ without success. Pinion-crown set will be manufac-tured and installed as well as a new pneumatic clutch… In March 2011, the Company awarded the contract to manufacture parts for the start-up of the mill.
Sep 28 2011. …Some works were performed for the expansion to 300 tpd and the remodeling of the mill. The advances were: Crushing: Secondary cone crusher was rehabilitated; the crown-pinion set adjusted; socket-liner, dust cover and shims were replaced, as well as the rectification and head balancing of it. Milling: The manufacture of the components for the 10'x10' mill started in May. In mid-July, the contractor reported a delay in the manufacture of the crown and pinion due to poor quality of material. The new delivery date and tests are expected by the end of October. Production during Q1 has been negatively affected over the previous quarter due to: (1.) Intermittent power supply from the grid and landslides on roads to the plant because continuous rains. Also, some mechanical problems arose in 6'x5' and 6'x12' mills. (2.) Low mineral grades fed into the plant because of rock stability in two major production areas (NW FLORIDA mine, 1355 level and Tajos Cuates mine, Chalata level, 611 stope). Also, due to the delay in San Francisco Project and lack of mineral from Macedo area. (3.) Delay in commissioning of the 10'x10' mill… Also, 10'x10' mill is expected to be in operation by November.
Nov 29 2011. …Operations during Q1 have been affected over the previous quarter due to:
(1.) Intermittent power supply from the grid and landslides on roads to the plant due to heavy rains. Also, some mechanical problems arose in 6'x5' and 6'x12' mills. Delay in commissioning of the 10'x10 ' mill. Also, the 10'x10 ' mill is expected to be in operation by early December.
Jan 25 2012. …The developments continued on the Company’s expansion project to increase mill through put to 300 tonnes per day. Highlights included:Crushing: Foundation was completed and support columns were placed to install the 5’x10’double bed horizontal screen. Also, the secondary 3' cone crusher was rehabilitated. Milling: The following components have been received at the plant for the 10’x10’ new ball mill: pinion gear, coupler, pneumatic clutch and its peripherals. Assembling of the components is ongoing and the testing is scheduled for early January… Re-calibration works were completed for the transmission power line and the Company expects to initiate tests once the new 10’x10’ ball mill is in operation.
Apr 30 2012. …In February 2012 the 10’x10’mill was placed on production and the mill achieved 70% of rated capacity achieving an average production of 12.41 tonnes per hour. During the commissioning phase there were signs of slight vibrations and an investigation identified a defect with the pinion. The 10’x10’ mill was shut down for repair of the pinion and is expected to be back on line by the end of April 2012.
Sep 27 2012. …The testing of the 10’x10’ ball mill continued and testing detected again, although to a lesser degree of intensity, tapping and vibration and the decision was made to not operate thes equipment with this ongoing deficiency. The crown was removed and sent back to the workshop in Puebla for inspection and for manufacturing a new pinion. The work to make the repairs was completed in late August 2012.10’x10’mill was shut down for repair of the pinion and is expected to be back on line by the end of April 2012.
Oct 29 2012. …The Crown and Pinion of 10'x10' mill were tested with negative results. The manufacturer of the components proposed dismantling and manufacture of new gears within 6-8 weeks. Meanwhile, a quote for the same job from METSO is expected. The delay in bringing this mill online continues to negatively impact the throughput. As a result the Company is now investigating the acquisition of a replacement ball mill.
Jan 29 2013. …Attempts to repair the 10'x10' ball mill on site were unsuccessful and the Company took steps to dismantle the crown and pinion and return same to the supplier. Additional work is required before a decision can be made on this ball mill.
Apr 29 2013. …An agreement was reached with suppliers to manufacture a robust crown and a new pinion. The crown is being machined in Chihuahua and the delivery date is anticipated in late July 2013.
Sep 27 2013. …The work programs to install the refurbished 10’ x 10’ ball mill continued through-out fiscal 2013 and, as of the date of this MD&A, the final start-up date has been delayed to late October 2013. Progress is being made but there have been numerous manufacturer delays beyond the Company’s control. Start-up of this new ball mill will allow the Company to significantly increase through put and reduce per unit operating costs
Oct 30 2013. …As previously reported, the work programs to install the refurbished 10’ x 10’ ball mill continued during Q1 and, as of the date of this MD&A, the final start-up date is expected in late November 2013.
Jan 28 2014. …Overall production levels have not changed in any material respects and the ability of the Company to significantly increase productions levels is dependent up the Company completing the capital projects in progress (at) the mill and successful exploration and development results to identify additional mineralized material. As of this date the refurbished mill was installed and initially put online in January 2014, however the mill has not yet operated continuously due to some mechanical issues with supporting motors and feeder bearings. The refurbished mill has now been taken offline and is not expected to be back in full time service until late February 2014.
Apr 25 2014. …The ability of the Company to significantly increase productions levels is dependent upon the Company completing the capital projects in progress at the mill and successful exploration and development results to identify additional mineralized material.
There are three capital projects in progress which require completion in order to see significant increases in mill operations. The capital projects are installation of refurbished 10` by 10` ball mill, construction of a new 60` by 12` thickener tank and installation of furnaces and related infrastructure to produce dore bars as opposed to precipitate.
As of this date the refurbished mill was installed and initially put online in January 2014, however the mill has not yet operated continuously due to mechanical issues with supporting motors and feeder bearings. The refurbished mill was taken offline in January 2014 and has only recently been put back in full time service.
Sep 25 2014. …The ball mill was initially put on-line in January 2014 but only operated for several days when mechanical issues with supporting motors and feeder bearing resulted in the mill being taken off-line. Repairs were made and on March 14, 2014 the 10′ X 10′ ball mill went back on-line however it only operated until May 27, 2014 when issues with the powertrain and crown and pinion bearing set resulted in the mill being taken off-line for further repairs. On August 5, 2014 the 10′ X 10′ ball mill repairs were completed and the mill was brought back on-line. The mill has been operating without significant issue since August 5, 2014.
The increases in gold and silver production in Q4 were due to increased mill throughput due to commissioning of the 10′ X 10′ ball mill…
In Q4 the Company produced 2,175 ounces of gold and 90,146 ounces of silver as compared to 1,419 ounces of gold and 52,495 ounces of silver in Q3…
The gold equivalent production in Q4 was 3,550 ounces as compared to 2,259 ounces in Q3…
Production during fiscal 2014 was 6,275 ounces of gold and 269,690 ounces of silver compared to 2,898 ounces of gold and 305,186 ounces of silver during fiscal 2013 production…
The gold equivalent production in fiscal 2014 was 10,533 ounces as compared to 8,419 ounces in fiscal 2013…
The 10′ X 10′ ball mill was off-line for repairs for all of June and July 2014 and was placed back on-line on August 5, 2014. The increased August production was due to the ball mill being in operation.
In addition to conducting work on its own properties the Company has received property submissions from parties interest in selling or joint venturing their properties. The Company has a significant competitive advantage given its operating plant and has attracted attention from a number of property owners near the Mina Real mill.
Oct 29 2014.
During Q1 the clutch system of the 10 ́x10 ́ ball mill was thoroughly checked by a contractor to correct the premature wear and tear of bolts, shoebrakes and caps. It is necessary to replace the clutch and to manufacture a new sole-plate to eliminate the existing problem however the mill remains online while these repairs are pending.
Jan 29 2015.
The increase mill throughput in Q2 vs Q1 was due to the 10′ X 10′ ball mill being off-line for repairs for all of June and July… The 10′ X 10′ ball mill operated normally during Q2 but not at full capacity. As of the date of this MD&A the Company is still waiting for the contractor’s quote for further refurbishment procedures to establish optimal production… The Mina Real mill also experienced numerous operational challenges during Q2.
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