RE: Question about El TenIf anything recoveries have come down slightly at El Teniente. The primary milling complex is huge and getting a batch of rock through is time consuming. Some of the equipment is also older. I hear that El Teniente is actually reducing processing (especially grinding) time to bring costs down. Primary ore grade is around 1.0% and ARG's tailings are typically 0.1%. But ARG's grade has been higher in Q2 (it is somewhat implied in their last press release).
If El Teniente's recoveries have in fact dropped from, say 90% to 88% (or roughly thereof), such a change may not have any impact on its profitability. The 2% copper they give up is likely compensated by lower costs. In the end, management may make roughly the same amount of money in either case, but the economic model will look better (i.e., margins wider). As for ARG it would certainly benefit from any grade increases.
I am predicting ARG's production in Q2 will be 8.0 mm lbs. of copper and 200,000 lbs. of moly. This assumes grade has been higher than normal as "normal" grades should produce 7.5 mm lbs. of copper and 187,500 lbs. of moly.
Grades can fluctuate quarter to quarter (i.e., Q1 grades, especially for moly, were below average) so I'm not assuming Q2 grades are the "new average". That said, if it is true El Teniente's recoveries are marginally lower or if they are mining a section of the mine that has higher grades for a longer time, then it is conceivable ARG's grades for the rest of 2007 and beyond will be somewhat higher. And that would be nice.
I am not assuming these higher grades to continue into