RE: RE: RE: TD Maintains LSG at buy but cuts targe"We recently completed a detailedproduction re-forecast for the full year 2011. For the second half ofthe year, we expect that both our mining and processing rates willimprove. However, we also have lowered our estimates for head grades as aresult of less mining in the higher grade UM1 Zone than planned and abroader distribution of mineralization resulting in larger stopes andlower mining grades in other zones planned in 2011.
As we continue to build ourunderstanding of the Timmins Mine orebody, we are recognizing that someof the mineralized zones are broader than previously understood. Thiswill affect our average grades in 2011 as we mine more tonnes at lowergrades, but in the longer term it may result in more overall ounces,although further work is required to confirm this.
In the re-forecast, we havedeferred 130,000 tonnes of ore we had previously planned to mine fromthe UM1 Zone in 2011 until early 2012. This resulted from a change tostope planning and design to allow more time for additional development,to reduce backfill cycles, improve ground control and to minimizedilution.
As a result of lower headgrades planned for the remainder of the year, reflecting mine sequencingand broader mineralized zones, we are revising our target productionlevels for the year, and now expect to pour 85,000 to 100,000 ounces of gold in 2011, down from our previous estimate of 125,000 ounces.
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You believe the lower grade is temporary due to operations. I believe the modelling was off, and lower grades are likely permanent.
Only way to find out is to wait a year. As highlighted above, it's been already been stated to expect lower grades for the remainder of 2011. So if you're right, now is a good entry point. But if I'm right, now is not a good time. To each his own.