Banks Island Gold Ltd BKSLF

Speculative thoughts

[miningman]

The fact that there were two initial months with reasonable levels of gold production, followed by disapointing numbers for six-eight months has a number of people querying "How can this be so?". It is pure speculation on my part but the PEA provides some clues. The Bob zone had a significant amount of development already completed by previous operators. This would have allowed initial production to commence, with very little initial expenditures on development. Also depending on the stope geometries , it is not difficult to envisage initial ore production from areas that had not sufferred from caving, resulting in massive dilution. Once these mining practicalities were recognised, I imagine that dramatically higher costs were incurred trying to catch up on requireed development, and this time period seems to co incide with the availabilty issues in the DMS/ milling circuits. Going forward , we should all focus on the results of the last three- six months , rather than the initial two months of easy production. Published numbers show that monthly production is less than 1000 ounces, vs the planned 1800-2000 ounces. BOZ needs to double production at a time of limited working capital, higher anticipated mining costs, (I cant speak to milling or admin costs) and dropping ore reserve grades. Just a heads up for anyone who thinks this is a slam dunk gold mine that might make profits in the near future. Too many head winds IMO