(Lamaque and San Juan combined)
C$10,000,000 monthly Gross Revenue equates to C$120,000,000 on a sustainable annualized basis
Tpd hit 1,000 in first half of August, primarily from Lamaque 2 alone.
Bedard Dyke development has been far advanced and long-hole Bedard Dyke mining is expected to start in early October.
Portal work on the North Wall started in July (likely 4 months ahead of schedule).
1) Lamaque
A Lamaque formula that would work:
*1,600 tpd (1,000 Lamaque 2, 400 Bedard Dyke, 200 North Wall)
*4.5 g/t grade (improvements with Lamaque 2 grade, and further improvements from blending with higher grade BD and NW)
*96% recovery
4.5 g/t, 1600 tpd, 96% recovery = 6,670 monthly Lamaque ounces
6,670 less 667 delivery to Deutsche Bank = 6,003 net ounces
6,003 * US$1,241 sustained gold price average * 1.04 exch = C$7,748,000 + C$61,000 monthly price participation on the DB ounces = C$7,809,000 monthly Lamaque Gross Revenue
2) San Juan
1,700 monthly ounces * US$1,241 * 1.04 exch = C$2,194,000
3) Century overall (Lamaque + SJ)
C$7,809,000 + C$2,194,000 = C$10,003,000 monthly Century Gross Revenue
If everything continues to move forward, it seems like a real possibility for January or February, or even December of this year.
6 comments:
Hi Prod05
Had done several simulations using varied tpd, ore grades and gold prices. The average annual gross revenue derived came close to your figure which i take as C$10millionx12=C$120,000,000
Jan. 4`10 NR:
``Century expects that the reopening of the Lamaque mine complex will have a significant impact on the economy of Val d'Or, Quebec. Up to 250 employees will be employed at the mining operation at full capacity, bringing millions of dollars to the community, the region and the province of Quebec, and once again Century will pour gold from Val d'Or.``
The 250 represents all in-house workers once Lamaque is at full capacity based on current mine plan. It includes the 40 (or so) Lamaque G&A people. Full capacity at current mine plan means Lamaque at 2,000 tpd, 4.77 g/t grade and 96% recovery rate.
The 250 employees would not include contractors performing development work. For example, the contractors currently performing development work at the Bedard Dyke would not be included in the 250. The development work is not ongoing.
It`s not clear if capacity production levels can still be handled with 250 Lamaque staff or if the number needs to be changed. I don`t see why it would need to change though. The low-profile equipment is doing what they expected it to do. There are a lot of labour savings built into the plan as a result of switching from mining with jacklegs and slushers in the flats over to low-profile equipment (for a great majority of room and pillar mining at Lamaque).
Ballpark monthly Lamaque compensation at current mine plan capacity:
250 * C$6,000 average ballpark remuneration for entire Lamaque = C$1,500,000 ballpark monthly compensation
There will be plenty of other monthly operating costs, including:
*fuel
*underground and above ground facilities (electricity, water, heat, air, etc.)
*replacement parts
*external maintenance and service contracts
*supplies (including blasting supplies)
*items unique to the milling circuit (i.e. cyanide)
*fees
*insurance
*systems/technology at Lamaque, including hardware, software, upgrades/maintenance
*monthly equipment financing charges
*refining and transportation
*look ahead drilling (costs not already cover in labour and some of the other categories)
*ongoing reclamation
*any special requirements of the assay lab
*travel
*etc.
Nevertheless, the C$7,748,000 in monthly Gross Revenue for Lamaque (@ 1,600 tpd) will go a long way.
The 250 employee level is really for 2,000 tpd. Let`s run the Lamaque Gross Revenue @ 2,000 tpd:
4.77 g/t LOM grade, 2000 tpd, 96% recovery = 8,833 ounces
8,833 - 667 DB = 8,166
8,166 * US$1,241 *1.04 = C$10,539,000 + C$61,000 participation DB ounces = C$10,600,000 Lamaque (alone) monthly Gross Revenue at current mine plan capacity (2,000 tpd)
The 250 employees relate more to the C$10,600,000 Lamaque monthly Gross Revenue.
The C$7,748,000 (1,600 tpd) Gross Revenue level should theorectically require less than 250 employees for production purposes (excluding development work).
Again, all of this excludes contractors and other costs relating to one time mine development work (i.e. Bedard Dyke, North Wall.
I think it`s safe to say that if we reach these levels of Gross Revenues with 250 max employees, we will be in excellent shape with regards to operating profits at Lamaque.
Prod 05
Like to know the followings:-
1) Is it true that an operating mine in Quebec is not subjected to corporate tax in the first 6 years of operation?
2) Since CMM bought over the previous company that already had incurred years of losses. In what way does this affect CMM's cooperate tax payable going forward?
Hi Prod05
Chillby had just said DK and KH struck him as being very much on top of things(very glad to hear that). And I note that you are literally keeping a daily log on what is happening in the mines as this latest summary shows!
Reading tro your past postings took time and effort and for one who knows very little about gold mine/gold mining like me, it is particularly hard work and at times confusing though not discouraging. Having come this far, I can now grasp the essence of your thoughts fairly quickly and I really do hope serious CMM investors get to read the blog postings in general and get to read all your material in particular. I am certain they will not be again scared silly in the face of falling share prices and worst still being induced to sell off their shares. In short, your writings/information together with other posted material in the blog are truly empowering and literally enriching too.Frankly, I can read the world's happenings in the net but I can only figure out CMM tro this blog!
Hi Wingfong,
Unfortunately, I have no idea with regards to question 1. I had never heard that before.
As a side note, we should get a certain percentage of our exploration expenses reimbursed (though, the lag time is probably a good year or so).
With regards to your second question, here is a note from the Jan`09 Lamaque study:
``$80 million in tax losses from previous operation will be carried forward and used as needed to minimize tax``
I don`t know what the current status is on that credit. Though, I`m not sure why it would change, as Lamaque hasn`t been in commercial production subsequent to that report.
However, Century did end up paying about $2.4M in ``Income Tax Expense`` in 2009. It`s a bit confusing. The logical thinking is it would relate to paying taxes in Peru. Then again, it`s further confusing that we would have to pay taxes on a net loss situation (unless the calculation is strictly based on operating profits). The calculation is shown in Note 17 of the 2009 Y/E financials. To be honest, I have absolutely no clue how that calcuation works. Maybe this was one of the key contributors (going back and forth with the Peruvian government) to the delay in issuance of the 2009 Y/E financials.
Anyway, I don`t know what the current status is with the Quebec tax credits. Logic would suggest that the tax credits wouldn`t just disappear overnight. In Canada, I think one is able to go back a few years with personal income tax losses (possibly even 7 years - I really don`t remember exactly though). Once would think that a similar approach would be allowed with Corporate income tax credits.
Prod05
Comments noted with tks
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