RE:RE:RE:RE:RE:RE:RE:RE:RE:Hedging -= shot themselves in the footfirecracker 74, Yes, as far as I know, Spain has named mines as essential businesses, so lockdown does not apply.
From the 2019 Annual Information Form, here is the summary of 2019 gold production at El Valle:
"During fiscal 2019, the production at El Valle of 64,327 ounces gold was 10% higher than the previous year due to a combination of 6% higher throughput and 4% higher head grade. Gold head grade of 3.26 g/t, compared to 3.13 g/t reported in fiscal 2018. Copper production in fiscal 2019 was 5.1 million pounds, compared to 5.1 million pounds in fiscal 2018, with production exceeding guidance. The ratio of oxides to skarns processed in the mill was at the level of 43% during fiscal 2019, increasing to 282,000 tonnes, compared to 37% and 231,000 tonnes during fiscal 2018. The 6% increase in oxides ore milled resulted in a 10% increase to gold production during fiscal 2019, as compared to fiscal 2018. Mechanical advance rates in oxide areas continued to improve, increasing by 17% to 7,998 metres during fiscal 2019, as compared to fiscal 2018. The Company mined during fiscal 2019 higher gold grade oxide tonnes, and blended them with a ratio of 43% together with skarn ore. Historically, the ratio of mined oxide to skarn ore has been approximately 22% until fiscal 2018. In fiscal 2019 a SCADA (supervisory control and data acquisition) system was implemented in El Valle Mine to control the ventilation system, with focus on power cost control and air flow optimization. Evaluation of backfill processes continues in progress, to improve logistic efficiencies and materials blend with focus on cost control. A project is in progress to review mine maintenance programs (processes, workforce, technical services), being the main targets equipment availability increase and maintenance cost reduction. The Company continued its plant improvements in fiscal 2019, in order to allow for the processing of a higher ratio of oxide ore.
Studies are progressing to improve copper recoveries in a higher oxide blend, targeting 68% to 72%. Metallurgical studies are also being conducted to reduce the buildup of in-process gold from the increase in oxide ore processed in the plant." During the last 3 quarters, El Valle has processed mostly low grade skarn ore, and the oxide crews were devoted to catching up on backfill and developing toward the East Breccia area.
https://www.prnewswire.com/news-releases/orvana-provides-exploration-update-for-spanish-operations-strong-potential-to-increase-mineral-reserves-and-resources-660267103.html This East Breccia zone is very high grade zone. They had one drill hole with
64.27 grams/t gold over 4.9 meters, and several holes intercepting rock above 100 g/t. My sense is that several new oxide areas will be opening up, so that oxide production can be ramped up before wet and rainy winter weather arrives in fiscal Q1 2021. In my production model, I use a conservative 6.2 g/t for oxide ore grade at Boinas, 1.6 g/t for skarn production, and 2.8 g/t for Carles ore. At 50 percent oxide ore throughput, my model predicts 18,700 ounces of gold production from Orovalle. At 60 percent oxide ore throughput, gold production increases to 20,800 ounces.
When crews get into the high grade East Breccia zone, average oxide ore grades would increase significantly. At 9 g/t gold, gold production would increase to 28,700 ounces, and the amount of hedged gold would be less than 30 percent. In this scenario, I believe that Orvana would make a significant profit in fiscal Q4-- up to 25 cents per share at an average gold selling price of $2000 USD.