RE:RE:RE:Hey Gandalf Greendayyyy,
First of all, thank you for taking the time to respond to my post. I had you pegged as an ordinary basher
Based on those FVI posts. How wrong I was!
If you added to your FVI position at $3.80 per share, you obviously are an astute trader who made a very well timed trade. Congrats on your new FVI shares!
My own interest in FVI is based on the Lindero mine in Argentina which is 4 degrees latitude further north than Orvana’ s Taguas project, Lindero’s gold deposit also contains 0.11 percent copper, which made Lindero’s 43-101 report a must read report for me.
After studying the heap leach design and modeling out its first year of production with a my own heap leach model, I concluded that the Lindero mine ramp up would take longer than projected by management, and that the leach rate was inadequate to fully leach the orebody.
Lindero’s ore leaching strategy outlined in their 43-101 report was to maximize the production and recovery of gold while minimizing the recovery of copper. The heap leach design called for a 30 day primary leach at 12 liters per square meter per hour followed by a 60 day secondary leach at 6 liters per square meter per hour. The Lindero leach plan called for 66,600 square meters to be under secondary leach for a total flow rate of 400 cubic meters per hour, while 33,300 square meters are under primary leach for a total flow rate of 400 cubic meters per hour to the primary leach.
Heap leach areas are segregated so that barren leach solution gets applied to the secondary leach with discharge to an intermediate pond, while the intermediate pond solution is applied as the primary leach solution with discharge from the primary leach reporting to the PLS pond.
With this leach plan, it would take at least 90 days to reach steady state leaching with 100,000 square meters under irrigation.
That was the initial leach design. The reality of the current situation at Lindero based on what management stated on the recent Q3 2021 conference call is that the entire heap remains under continuous irrigation including the slopes, and there was no reference to the word copper or to the SART plant in the Q3 2021 MD&A. Based on the 6 million tons of ore stacked to date, the estimated area under leach would be 330,000 square meters stacked 10 meters high,
So the question is how does one leach 3 times the 400 cubic meters per hour in order to maintain a continuous leach of the entire stack?
I suspect that we will find out on the Q4 conference call which should happen at the end of the Southern Hemisphere summer.
Sustaining capex increased to $9.385 million USD in Q3 with the funds likely going to expansion and upgrade of the ADR/SART plant. I suspect that the project to increase the leach rate to 600 cubic meters per hour which had been planned for year 3 of production has been moved up to the current year.
Lindero’s recovery target for gold is 75 percent, while the expected copper recovery is only about 19 percent. Lindero’s cyanide use per ton of ore is only about 0.60 kg/t in comparison with 3 kg/t applied at Parral. However, if the entire heap remains under continuous leach that implies that the cyanide use is significantly higher than the design application rate in the 43-101 report.
So, let’s review the leach history at Lindero since the start of ore stacking on July 10, 2020. Irrigation of the heap commenced in August, 2020, and on October 20, 2020 Lindero had its first gold pour of 728 ounces. As of the end of Q2 2021 Lindero had stacked 153,810 ounces of gold and recovered a total of 55,288 gold ounces for a cumulative recovery of 35.9%. Stack gold inventory was listed as $25.35 million USD at the end of Q2.
At the end of Q3 2021, Lindero had stacked a total of 202,873 ounces of gold on the stack and recovered a total of 81,523 ounces for a cumulative recovery of 40.1 percent of the total gold ounces stacked. Stack gold inventory increased to $30.5 million USD.
Q3 2021 quarterly gold production was 26,235 ounces or 53.4% of the 49,063 ounces stacked during the quarter. The cumulative gold recovery increased approximately 4 percent from the previous quarter, so the revised leach plan is apparently recovering ounces stacked in previous quarters.
If another 3 percent of the gold stacked to date gets leached off in Q4 2021 in addition to the estimated 24,000 ounce Q4 gold production, then the total gold production at Lindero could be as high as 30,000 ounces in Q4.
Lindero’s AISC per ounce of gold sold in Q3 2021 was $1270 USD/oz, up from $1214 USD/oz in Q2, and up from $1055 USD per ounce in Q1 2021. 30,000 ounces of gold production would take the Q4 AISC down to $947 USD/oz which IMHO would be viewed by the market as extremely bullish event.
FSM stock remains on my watch list, although I don’t have a position in the stock.
I find it curious that a management that takes the time to test out a 70 percent copper recovery and an 89 percent gold recovery at Don Mario OSP tank leach is viewed as a "garbage can", yet CEO Ganoza went into Lindero with a defective heap leach design and only achieves 40 percent recovery after a year of operation at Lindero having spent $100 million more than initially budgeted is viewed in a favorable light?
ganndolph