RE:FinancesThe big drop in share price in 2012 was due to incorrect reserve estimates and incorrect mining plan that had to be redone that took a year and by then the bear market was in place for silver. We are a very different company now however.
"The Corporation has identified an unexpected divergence between the mineral resource and reserve estimates set out in the technical report dated March 28, 2011 and entitled Mineral Reserve Update, Nuestra Seora, NI 43-101 Technical Report (the "Nuestra Seora Technical Report") prepared for the Corporation by Genivar Inc., and the actual mineralization that the Corporation has encountered in the main production areas between Levels 8 and 12 at the Nuestra Seora Mine. The Corporation has encountered ore with lower than estimated lead and copper grades in these production areas, and development and definition drilling has identified lower tonnages relative to what was expected in the Nuestra Seora Technical Report.
In order to better understand this divergence, the Corporation has commissioned a comprehensive update of the Nuestra Seora mineral resource and reserve estimates. As part of this update, in Q3 2011 the Corporation engaged Mine Development Associates, an independent expert, to prepare new resource and reserve estimates that are compliant with NI 43-101 and that take into account the latest information available to the Corporation. The Corporation expects the new resource estimate to be available by the end of Q2 2012. An updated reserve estimate is expected in late Q3 2012 or early Q4 2012.
As of the date of this press release, the Corporation's current assessment of the geology, exploration and production data indicates that the mineral deposit at Nuestra Seora is not as continuous as previously interpreted. The model developed by the Corporation based on the geological information and data available to it at the time, predicted areas suitable for block mining from large stopes. However, geological information and data from actual mining received by the Corporation since the development of such model suggests that the mineral deposit is more variable in distribution and continuity, and more confined in extent than anticipated. Accordingly, management expects a significant reduction in the resource and reserve estimates at the Nuestra Seora Mine. The magnitude of the reduction cannot be accurately quantified at this time. Such a reduction could adversely impact production, life of mine, and cash flow forecast, including the Corporation's previously released production guidance for 2012. A reduction in operating earnings from this mine could negatively impact earnings and the financial condition of the Corporation."