EP Speculation Conclusion To conclude my speculative B.S., production from EP will include 4 sections:
The first 3 sections or ore are of a supergene nature with a high copper content to be blended at a ratio of 6:1 with "regular" ore. The first 2 sections are unaccounted for in the reserve and resource estimates. They will be a welcomed "surprise" and after mining will not decrease the reserve estimates for EP.
Firstly, using my best guess figures from the last post, the Pay Streak will provide ~7000 oz gold
Next, the Riddle Till will provide ~17000 oz gold.
So, financially, consider that GBN has proven all-in costs last quarter at underground Roy Lloyd were $1550. This figure includes mining costs, depletion, wages, administration, appreciation in note payable value, and exploration costs. Taking out the repaid note payable and exploration costs from the equation all in costs are $1490/oz. It may sound grim but it's a start up operation and will improve. I also would speculate that open pit mining costs will be lower than the mining costs of $900/oz at undeground Roy Lloyd but for argument sake we will use the $900/oz cash cost.
At $1700 POG, that leaves ~$200/oz X 24,000 oz = $4.8M. If you have believed any of my speculative B.S. the ~54,000 tonnes of ore from the Pay Streak and the Riddle Till will be stockpiled in ~180 days. This is free unaccounted for cash. "Unexpected" bonus!! Any mining costs that fall under $900/oz is another extra bonus.
In section 3, GBN starts mining the ~9,000 oz of EP reserves. 50,000 tonnes of ore still of supergene nature. Comprehensive income of $1.8M stockpiled on the ground waiting for processing.
Section 4. Now this is where it gets good. The primary ore is not of a supergene nature and will not require blending. So how much ore and what is the grade? The best sources are the EP Tech Report from May 8/07 on Sedar or the gov't archives. But I will speculate. How's 250,000 tonnes @ 5 g/t. So mining at EP continues at a rate of 300 tpd and this ore can run right thru the mill - no need to blend the primary ore. For people who like numbers - 300 tpd X 5 g/t = 1500 grams/day divide by 30 = 50 oz/day X 90 days/Q = 4500 oz/Q X $200/oz comprehensive income = $900,000/quarter from the primary ore at EP which the under-utilized Jolu mill undoubtedly has the capacity to handle. But that is not the only bonus - because as the tonnage of "regular" increases so does the amount of additional processing of supergene ore. At a 6:1 ratio, that's an additional 50 tpd of supergene ore at 10 g/t (low-balled) for processing - 1500 oz per quarter or $300,000. Taadaa a fully utilized 700 tpd mill using the ore from Roy Lloyd and EP. Small potatoes but I'll gladly see this company's net comprehensive income increase by $1M or more per quarter.
The next extra bonus that comes from fully utilizing Jolu's 700 tpd needing only EP and Roy Lloyd is that it will allow time for the development of Komis. Which after 2+ years they will need as the primary ore from EP will be depleted with one year of 100 tpd mill feed remaining from the supergene stockpile.
Don't believe me, go back to those links and look for this:
The primary EP Zone mineralization is hosted at the intersection of steeply dipping northnorthwest/south-southeast extensional quartz veins with the gently dipping EP Zone dyke.
Drilling indicates the quartz vein swarm is on the order of 60 m to 70 m wide. The quartz
veins can host bonanza grades as seen in drillhole EP-46 where one intercept carried 939.5
g/t Au/0.8 m. This style of mineralization is almost identical to the Komis mineralization
except that at Komis, secondary structural controls consist of east-west striking, vertical
dipping aplite and granodiorite dykes.
During the most recent glacial period most of the supergene mineralization was eroded by
glaciers except for the southernmost fringe of the present day EP Zone which was protected
by andesite cover rocks.
Me again - so the Komis reference is from the EP Tech Report. That east west striking refers to my 5 Komis zones, A B C D E. EP is basically a flat alluvial shaped deposit.
250,000 metric tonnes grading 5 to 7 g/mt
Au plus about $2 million worth of
recoverable Au in overlying till.
Waddy Lake Mines
By Dec 2002, Golden Band had a non 43-101 compliant estimate for EP of 573,000 tonnes @ .39 oz/tonnes.
Trust me when I say that this entire story is pure speculation. It all may be B.S. But it certainly gives me comfort that things have the potential to progress.
There is a high likelihood of me going off-line on the stockhouse BB in the next two weeks. This by no way means is a loss of faith in the direction of GBN. If you have questions ask now!! Any questions regarding the deposits - it will soon be your last chance for an informed answer. Unfortunately, I do not have a crystal ball but I do believe this SP is going up - way up.