3rd qtr highlights
THIRD QUARTER HIGHLIGHTS
1. During the quarter the Jerritt Canyon Mill produced 35,524 payable ounces, a level of gold production from the Jerritt Canyon mines not achieved since 2006, and a significant increase from the comparative 21,296 ounces of produced in the third quarter of 2011 which included high grade purchased ore from Newmont. The record level of production this quarter is attributable to the steady state production achieved in June and maintained throughout the quarter, with the Company having overcome all the equipment commissioning issues experienced after the major mill refurbishment work undertaken in the first quarter.
2. The Company continued to invest in the development of the SSX-Steer mine, opening up several new zones for long term mining and bringing in the remaining underground trucks to increase the tonnage to an average of 1,066 tons per day, close to the targeted 1,200 tons per day (achieved several times throughout the quarter). The Company also began testing long hole stoping methods, a more productive method of mining that will lower the overall production cost. The ground conditions at the SSX-Steer were amenable to this form of mining and the Company has taken delivery of a long hole drill early in the fourth quarter to implement this on a long term basis.
3. Early in the quarter the Company commenced earthworks at Starvation Canyon, including construction of the road infrastructure and drilling of the portal. Full development of this third mine commenced later in the quarter, with Small Mine Development, LLC (“SMD”) mobilizing to the site to establish the portal and begin the initial shaft. Starvation Canyon is a higher grade deposit and will provide between 300 and 600 tons of additional ore to the mill by the second quarter of 2013.
4. The Company recorded net income of $9.0 million in the third quarter of 2012 compared to a loss of $18.0 million in the third quarter of 2011. The net income in the quarter is primarily attributable to $51.5 million in revenue achieved through the increased gold production. The Company also achieved cash-flow from operations of $3.8 million during the quarter, this is the first positive operating cash-flow achieved since the third quarter of 2007.