Advanced exploration program and bulk sample In my latest post I tried to outline various scenarios based on a milling agreement with Northern Sun Mining. Nevertheless, I forgot that Temex is not applying to become a producer, but for advanced exploration only, which change the scenarios that can be outline !
Advanced exploration mean that they can do more work on the property and that they have to submit a closing plan regarding this work. Usually companies plan to conduct a bulk sample in order to better assess the ore (grade, continuity, recovery, etc.) and don't need to mine a big bulk sample: they are mostly around 10'000 t, which doesn't produce much ounces of gold and cash flow. But some companies mine much more bigger bulk sample. For instance, Harte Gold in Ontario is preparing to mine a bulk sampling of 70'000 t. They projet is a high grade, underground of around 8 -10 gpt. They were planning to mine underground for the bulk sample, but they recently identified shallow high grade ore which would allow to mine the bulk sampe with less epxenses.The disadvantage for them is that the property has no infrastructure, so they had to apply to build a road. They have also a letter of intend with Richmond mines for milling the bulk sample, but the mill is located 120km away ! This example help to understand the advantage of Whitney with all the infrastructures nearby (roads are already on the property for instance).
And guess what: René Marion was appointed by Harte Gold in December 2012 to be a consulting Project Manager responsible for the development of the Sugar Zone Deposit..... and by Temex in March 2013 to the board and to work directly with the management team by chairing a new Strategic/Technical Advisory Committee.
The current resources estimates of Whitney indicates 300'000 ounces of 8 gpt within the open-pit design. The latest drilling campaign has shown numerous high grade intercept in the same area between 0-50m and they will probably define an optimized area whith the highest grade near surface in order to conduct the bulk sample:
| Hole | From (m) | To (m) | Core Length (m) | Au (g/t) |
| TW13-285 | 27.20 | 41.00 | 13.80 | 19.77 |
| TW13-288 | 47.40 | 56.30 | 8.90 | 23.41 |
| TW13-257 | 13.00 | 34.50 | 21.50 | 9.78 |
| TW13-250 | 23.00 | 29.20 | 6.20 | 8.84 |
So I tried to outline various scenarios based on a bulk sample program. Wether it is bulk mining or underground, the grade should be much higher than commercial production in order to generate cash flow. Also, capital expenses should be very low through mining / hauling / milling services.
| Scenarios | Conservative | Optimistic |
| Bulk sample (t) | 50'000 | 100'000 | 50'000 | 100'000 |
| Average gpt | 5 | 5 | 8 | 8 |
| Metallurgy recovery | 95.00% | 95.00% | 95.00% | 95.00% |
| | | | | |
| Number of ounces | 7661 | 15323 | 12258 | 24516 |
| | | | | |
| Gold price | 1300 | 1300 | 1300 | 1300 |
| Cash cost | 700 | 700 | 500 | 500 |
| | | | | |
| Revenues 60 % | 5'975'806 | 11'951'613 | 9'561'290 | 19'122'581 |
| Cash cost 60 % | 3'217'742 | 6'435'484 | 3'677'419 | 7'354'839 |
| Gross margin 60 % | 2'758'065 | 5'516'129 | 5'883'871 | 11'767'742 |
Cheers,