MJS: Boosting the gradeSurely we are all dissapointed with the slow increasing of goldproduction.
Surely managament also was too optimistic in the ramp up of the production. But in the coming Q3/2013 report to be published
end of this month we will see, if they could ramp up gold production somewhere between 5000 -10000 ounces/quarter. Basis on this speculation is CEO Rod Husband himself, cause in april 2013 he gave a newspaper interview in the International Resource Journal. According to this they aimed to ramp up the production in the past quarter to 0,6g/to - 0,7g/to through a pit grid programm. After completing the assay labor, the next target is 1,2g/to = 800000 - 1000000 ounces/year.
Let us verify his announcements !
Surely also Husband can't look in the future, but with some certainty we can await an increase in gold production in the past quarter. How much ? Knock on wood :-)
Best Regards, Fred
Here the newspaper article from april 2013:
An emerging mine
The Song Jiagou mine has now been in production since 2010: initially on a small scale, but beginning to expand following the completion of a mill in mid-2011. This mill was built relatively quickly and cheaply by a new local partner Majestic brought in, simultaneously buying out its previous partner and increasing its ownership stake in the project from 60% to 75%.
The Preliminary Economic Assessment (PEA) for Song Jiagou returned a Net Present Value (NPV) of US$525 million using a 10% discount rate and $973/oz gold price. It calculated a total gold production of 2.32 million ounces (Moz) at an average of 105,645oz per year for a 22-year mine life. The internal Rate of Return is 78.6% with payback in 1.4 years, following initial capital costs of $64.4 million. The life of mine strip ratio is 1.87:1 (waste to ore).
Open pit optimisation identified potentially mineable resources within the proposed preliminary production schedule to be 29.88 million tonnes (Mt) Indicated at a gold grade of 1.207g/t and 22.81Mt Inferred at 1.936g/t.
Gold production has been steadily increasing with every one of the past three years. A total of 4,709oz per year (oz/y) at 392oz per month (oz/m) in financial year 2010; 9,292oz/y at 774oz/m in 2011; and 18,969oz/y at 1,581oz/m in 2012. Over the next 9 to 12 months, Majestic aims to increase this figure dramatically to reach its ultimate goal of 100,000oz/y.
Boosting the grade
Majestic plans to achieve this massive production increase primarily through increasing the gold grade, for which purpose it is building an assay lab.
“The biggest problem we have now is the lack of grade control; where we’re putting everything that we dig up through the mill, because we don’t have the facilities on site to separate what would be waste from actual ore,” explains Husband.
“Constructing an assay lab will give us some grade control, which will start to increase our production significantly over the next several months. It will allow us to determine which blast holes are in ore and which are in waste before we blast them.”
Husband claims the assay lab will take three months to build and in the meantime, Majestic will be using a pit grid programme that will allow it to roughly separate lower grades from higher grades, raising the grade one step. “It’s not the optimum way to do it but that should take us from our current average of 0.35g/t or 0.4g/t to 0.6g/t or 0.7g/t, which would deliver a significant increase in production,” remarks Husband.
“Then, when we’re ready to do the more detailed assays three months hence, it will take us to the ultimate goal of 1.2g/t going through the mill.”