RE: RE:RE: 5 YEARS to mine out the high grade gold Good post.
Exploration costs should be minimal compared to last year. Madsen drilling is all but done for 2013 imo as a scoping study is undertaken. Most likely, this study will signal additional drills in 2014. Amisk meanwhile is pending a PEA. There might be some drilling prior to this report but most likely, additional drilling will come on the heels of the PEA. As for Seabee, mining specific drilling looks to be the game plan for 2013 with the exception of Santoy Gap as that area most likely will require some follow up drilling and additional exloration drilling. All things considered, the exploration drift will continue to Santoy Gap, studies undertaken on Madsen and Amisk and drilling on Seabee that will be way less than the $15M or so spent on exploration in 2012.
Santoy Gap is the asset I will be watching closely in 2013. To bring this gold into production in 2014, CRJ most likely will have to expand the mill. To high grade the operation, CRJ needs to start milling the ore from Santoy Gap and process less ore from Santoy 8. That way, CRJ is processing ore from Seabee Deep, L62 and Santoy Gap of which hosts the higher grades per tonne. Santoy 8 has lesser grade gold that is mixed in with overall ore and is trucked to the Seabee Mill. If Santoy Gap ore can be mined and trucked the same way, CRJ can by pass the Santoy 8 grades for awhile and defer the costs of a new mill and or mill expansion. Eventually, however, the mill at Seabee will have to be expanded OR a seperate milling operation is built in the Santoy area to process Gap and 8 rock. Total costs imo that can be handled via the current lines of credit and cash flow.
To close, I'm not all that convinced gold prices will trade down much lower and or that we encounter lower prices for an extended period of time. Time will tell. Gold prices aside, investors will be watching costs. Seabee resupply expenditures discounted, I'm looking for an average cost of $900 or less with the shaft tie in where CRJ indicated costs could come down as much as $100 per ounce. IMO, lower cost per ounce ounce produced and positive studies on both Madsen and Amisk could very well serve as catalysts going forward. GPT, aside from costs per ounce, is the other metric investors will be watching closely. Since Seabee was shut down for a while in Q1 where more Santoy Gap ore was processed, we might have to wait to Q2 results to get a better grip on GPT.