RE: BACK IN Feb 10:
"President and Chief Executive Officer, Neil McMillan stated, “Although we were able to do a lot of things right in 2011, we were disappointed with the production results. We were able to get the Santoy 8 Mine to commercial production but lower grade ore and unexpected circumstances affected the ability to produce forecasted production levels. To improve and sustain future production and reduce unit costs, the Company initiated the shaft extension and mill expansion, as well as increased investment in mine development, production equipment and infrastructure. We believe these plans will position the Company to expand production on a sustainable basis. In 2012, the Company plans on producing approximately 50,500 ounces of gold with the majority of these ounces expected to come in the second and fourth quarters.”
Pickeral,
Good post!
I'm back in as well and for much of the same reasons you have cited. Right now, however, I'm a little overweighted in what I have set aside for a longer term hold because I'm anticipating a quik double from current prices over the short term. If that materializes, I will no doubt take some chips off the table so as to lower the breakeven price on the remainder of shares.
To build upon your comments, Q1 was no doubt a poor showing. Higher expenses aside like one time charges in regards to re-suppy efforts and mill upgrades, grades processed were the lowest in over two years. Given the nature of narrow vein mining, that happens on occasion. Starting in Q4 and heading into 2013, higher grade ore looks to be placed into production that will be coupled with mill expansion efforts and cost saving measures like the shaft extention. Hence, looking good for the longer term.
In regards to the short term, I posted some comments made on Feb 10. Of particular note is that Q2 and Q4 were indicated to be the better production periods. With the bulk of re-supply efforts and one time equipement purchases absorbed in Q1, Q2 could very well put in a surprise on the earnings front when reported sometime in mid-August. Bolstering this thesis, and imo, is what looks to have been a curtailment of exploration expenditures in Q2 as well.
The April presentation indicated drill results in Q2 from Seabee operations. To date, there have been no drill results. Given Q1 performance and an uncertain market, I have surmised that CRJ opted to keep exploration expenditures at a minimum so as to bolster finances like cash on hand at quarter end. As we know, this is not the kind of market one wants to undertake additional equity financings. Hence, and unless critical to immediate mining needs and or already under contract, it can be viewed as prudent to delay and or curtail certain exploration programs til such time finances and the overall market improves.
That said, and if memory serves me right, 2 drills were indicated to already be turning at Madsen. With Madsen drill results indicated for both Q3 and Q4, we could be positioned to get some Madsen drill results over the short term that may (or may not) be a catalyst to a higher stock price. On August 08, that 1 millionth ounce is at least a feel good story that should generate some positive press in what looks to be a better PM market in general. Lastly, I think we are on tract to put in a much improved Q2 where "earnings" are the primary driver in the current market as opposed to "exploration".
To close, time will tell. At the very least, the improving PM market looks to raise all ships. In the meantime, thanks once again for your post. It has been a long time since something worth reading has been posted here and elsewhere.