Random thoughts: Borrowing permitted tonnes from the future Robert Reynolds
How does that play into your strategy for where you are going to run the mill at throughout the year because you did 2950 tons per day in Q4? I believe the annual permit caps you out at 2700 tons, should we look at like a step down to 2700 tons immediately and also as a follow-up to that, is there any flexibility to go above that permit level by any percentage in the year or is that a hard cap?
Joseph Ovsenek
I'll answer the second part first. That's a hard cap 990,000 tons per annum. So we will work towards that, average is 2712 a day I believe to do the math. So we will keep running to that. We have some flexibility to move up and down depending on the grade we are getting in the mill in that. So we will just monitor and manage it as we go through the year. If all goes really smoothly, maybe we get our 3800 ton per day permit a little sooner, we can ramp up quicker, but we are not banking on that. The plan is 3800 tons per day for January 1, so we will just manage through that 2700 tons per day through the year. So you will see some fluctuation quarter-by-quarter. I will look to average it out over the 12 months.
January: Tonnes milled:
91.100 Average grade:
5,4 gpt Ounces produced:
15,143 Tonnes per day:
2940 tonnes per day aprox (well above the permitted rate) If we extrapolate January numbers to December and take into account Q4 2017 production number, we would end up with around 27,5K ounces for October/November 2017 when everything was apparently going according to plan and PVG was approaching "steady state production"
27.500 * 12 = 330.000 ounces a year (far, far away from the 500K ounces expected)
February: Tonnes milled:
77.763 Average grade:
11,4 gpt Ounces produced:
27,636 Tonnes per day:
2775 tonnes per day aprox (pretty close to the permitted rate) This month...
...The high grade stopes could finally be mined
...Management could have decided" to save permitted tonnes" for the rest of the year expecting to hit the 75K ounces low mark anyway (what makes me think they were expecting significantly higher grades)
But the month end is arriving and they see that at 2700 tpd rate with that grade they are not going to reach the low mark...
March: Tonnes milled:
92,580 Average grade:
10,9 gpt Ounces produced:
32.910 (more on this below) Tonnes per day:
2987 tonnes per day aprox (way above of the permitted rate) This month...
...Head grade goes down despite new grade control system kicking in
...Management have no option but to run mill full speed to hit the 75K ounces low mark ("borrowing a significant amount of permitted tonnes from the future")
Calculating ounces produced in March: (92,580 *10,9 * 0,967)/31,1 =
31.377 ounces !!!!
But... wait a minute... they reported that 32.910 ounces were produced !!! That's a 1533 ounce (almost 5%) difference !!
Those ounces were really convenient... the difference between hitting or missing the 75k low mark...
And about borrowing permitted tonnes from the future... watch out the second part of the year if the grades did not improve !! GLTA