higher silver grades in the sulphide part of
the deposit and a slow start on the oxides
leach due initial weak throughput that appears
to have been resolved by adjusting reagent
requirements. Updated guidance for
2009 is 29 million lbs of copper, 16,600 oz of
gold and 895,000 oz silver. This is about
4700 oz less gold and 230,000 oz more silver
than previously forecast. With a good
hedge book and current copper prices GMI
can report cash net in the 20 cent range this
year.
Some of that money will be used for exploration
near the mine site, including a new target
adjacent to the existing pit and a series
of nearby on-trend targets. While it looks
like GMI should turn a nice profit, its single
mine profile and current reserves base is
causing it to lag others in the copper space.
The company’s nickel testing had created the
extra resource base, but now won’t be reflected
in the share price unless nickel sees
large gains.
Even though its now a producer, exploration
success that either extends the mine life significantly
or points to a second deposit would
be a big help. That sort of finding would also
make it a more attractive target. That said,
the company is also trading a very comfortable
price with limited downside. It is positioned
for quick gains on breakthroughs at
either the market or corporate level, and
should more simply grow price as operations
expand its treasury. Accumulate for income