RE:Any analyst, broker,bank comments this morning? Well I hate to say it , but I dont find these numbers encouraging. A total of 32,100 ounces of gold from 154,000 tonnes of ore over a two month period suggests a mill head grade of aprox 0.25 ounces per tonne. Now this is a very coarse calculation , it ignores gold behind ball mill liners as well as gold tied up in reported metallic slag. but non mining personnel are probably unaware that gold behind the mill liners is essentially tied up untill the end of mine life. Oh yeah , whenever the liners are changed out , that gold is recovered and reports to that months production but gold produced over the next few months is reduced by a corresponding amount while the voids are filled up again by metallic gold.. Slag probably does have some impressive grades, but is likely small quanties..... see the photo previously published showing a nice gold bar with only minor volumes of associated slag.
now this computed 0.25 ounces per tonne is computed using a mill recovery during tune up of only 90%, and this wiill improve. It also assumes an extra anticipated production of 10% that should be available after mill voids are fully charged, so it really is a very coarse calculation.
What must also be recognised is that the wording of this release is a bit cute in a number of areas. The emphasis on low grade stockpiles and llow grade development muck is a bit disengenous. By definition , development muck is low grade. The existing low grade stockpiles were derived almost 100% from development muck. There might be a few tonnes of hi grade stockpiled somewhere but I doubt it.
Wht isn't stated, but is implied from previous press releases, is that milling of 154,000 tonnes of stockpile material , probably represents something like 80% of the entire surface stockpile. I forget the exact number , but i recollect something like 185,000 tonnes having been previously pubished.
Now this means two things. If future months production is below expectations , management cant really attribute lower ounces to on going milling of low grade development muck. it a also implies that within 60 days or so , the mill will have to rely 100% on feed from underground.
Now several months ago , i predicted that the mine would need seven active stopes to provide the necessary feed, so i feel vindicated with this announcement of six stopes in production. An additional four stopes ready for driling also sounds healthy , but what is not healthy is the reported daily drill footage of only 235 metres. To me this implies two drills are functioning.
Any kind of availability problems with these drills will rapidly lead to a shortage of ore available for blasting which wil starve the mill of feed.
So the really big question , is what might be the expected mill feed grade once all ore is from the UG stopes. My past experience might suggest something like a 50% improvement on tune up low grade feed or 0.37 ounces per tonne . say 0.4 ounces or 12 grams. This is a long way off of reserve grades of 15 -16 grams. If I am anywhere close with my projections , previously published financial projections will not be attained.
And before anyone suggsts I am ignoring the benefits of extra milled tonnages in future months , i would point out that this reported 154,000 tonnes over two months already exceeds the nameplate annual capacity of 985,000 tonnes annually.