1) The constantly improving economics is narrowing the timeframe for achieving positive cash flow at Lamaque. We now have a good shot at getting there around the 5th month after first gold pour (not after start up), due to the following reasons:
* Mechanical mining is planned for months 4 to 6.
* The gold price is essentially US$1,100 right now. In a nutshell, we only have to lower our cash cost per oz to that level in order to break even operationally while we ramp up during the start up period. It makes our job much easier than if the gold price was say US$700 (as it was not too long ago). On top of that, a number of experts are now expecting the gold price to reach US$1,500 by June 2010. The way I see it, any gold price between US$1,100 and US$1,500 by June of next year just further improves our chances to achieve positive cash flow earlier in the ramp up phase.
2) Now, this next opportunity has the potential to be a real game changer for our reserves and also our production ounces in years 1, 2 and 3.
As we know, the company is planning to mine ounces located within 1,000 ft of the surface in the first 3 years. The locations they will be mining from during that period are as follows:
* The North Wall Zone - 256,708 P&P Reserves currently
* The Sigma West Zone - 22,108 P&P Reserves currently (but this is before adding in the Bedard Dyke ounces, which is being aggressively drilled right now, and should be material)
* The Cross-Over Zone - 0 P&P Reserves right now (but look below)
Now, here is the huge opportunity. In 2007, when we first learned about the discovery of the Cross-Over Zone, we were told that the ounces were located within 1,000 ft of the surface and we were also told that there were 1.7M new "virgin" ounces.
Take a look at M&I and Inferred ounces for the Cross-Over Zone. There are 530,098 M&I Cross-Over Zone ounces in our 43-101 report and 1,126,475 Inferred Cross-Over Zone ounces, for a total of 1,656,573 Cross-Over Zone ounces (close to the 1.7M virgin ounces that was talked about in 2007, being located 1,000 ft of the surface).
If I ran Century I would be drilling these Cross-Over Zone ounces hard right now - I would especially be focused on bringing most of the 530,098 M&I ounces in Reserves immediately. What could that do to our near-term production totals?
In addition, the North Wall Zone has 407,672 Inferred ounces. I would be drilling these ounces madly into reserves also.
As you can see, the opportunity to exponentially increase near-term reserves (1,000 ft of the surface) and increase near-term production appears to be enormous for all 3 near-term targeted mining zones (The North Wall Zone, The Sigma West Zone, The Cross-Over Zone).
I really hope this is what the $4M exploration funding is for. The company would be nuts not to execute the exploration plan I just described above.
2 comments:
A worrysome post was made by Rick on Oct 30th, saying that Century owes money to its former miners. Without a dedicated workforce you can't have a successful mine, no matter how much ore we have. If anyone is knowledgable about the specifrics of the outstanding financial obligations to miners of CMM, would you share that information.
Thanks; bigJohn
I think it relates to the last pay cheque (about $350K) when Lamaque was temporarily shut down. It was paid to the employees recently. The company had to go into survival mode, similar to most other junior companies, when the global financial crisis hit last year.
Many junior companies with debt ended up going under, while shareholders of other junior companies ended up having to settle for a 50 to 1 reverse share split. Many companies are still stuck even today, and are still trading for 1 cent per share with little or no hope of recovery.
Century Mining survived. Century couldn't pay anyone during the crisis as it barely had enough money to survive. People should be grateful that there will be a job to come back to. I know, personally, I'm grateful my investment is still here. I'm grateful everyday actually. I suppose I can only speak for myself, as everyone is different.
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