1) Nice little milestone here (from the Q2 M&A rpt, Outlook section):
``As of August 13, 2010, Lamaque underground ore production had reached close to 1,000 tonnes per day (tpd) and the mill is operating on a daily basis.``
We now seem to have enough ore to operate the mill efficiently on a daily basis. I think this is the first time in Century`s history for underground mining (without having to depend on stockpile ore). I think the last daily mill operation at Lamaque was 2007, but that was open pit mining.
2) Mr. McNutt didn`t really answer the Union Securities Analyst`s question about Lamaque no. 2 grade. Perhaps Mr. McNutt would still like everyone to reference the grade range given in the August presentation (``Initial startup head grade ranging 3.32 g/t Au to 4.37 g/t Au; expect life of mine to average 4.77 g/t Au``).
From Mr. McNutt`s conference call explanation, it sounds like the ore within the Lamaque 2 reserves area is consistent with reserve expectations. It sounds like it`s the ore in the extra ore (non-reserves) areas that contributes the lower grade. This is also consistent with Peggy`s explanation in one of the conference calls. I believe Mr. McNutt mentioned in this conference call they may be able to improve the grade in this area once they get a better handle on mining these mineralized extensions. Of course, some of the lower grade (economical) development material is also mixed into the average grade result.
It would be good if they eventually get the Lamaque no. 2 grade up to around the 4.0 g/t to 4.3 g/t range. They might be able to then load in the higher grade Bedard Dyke ore and eventually the North Wall ore to bring the overall average up to the LOM average of 4.77 g/t.
3) It would be good if they can do at least the mid point of the grade range for August, of perhaps 3.8 g/t.
3.8 g/t, 96% recovery, 1,000 tpd can give us a monthly run rate of 3,500 ounces (42,000 ounces on an annualized basis prior to full scale Bedard Dyke mining and prior to any mining from the North Wall)
4) They are currently in the development phase for long-hole stope mining. Per Mr. McNutt in the conference call:
* they have driven across the dyke
* they have done (or are doing) a cross cut at an upper level of the long-hole stope
* they are ramping down to do set up preparation work on the buttom fill of the stope
* they are putting in infrastructure for ventilation
* they will be doing some drilling work on the stope once access is ready
They are expecting to begin long-hole stope mining on the Bedard Dyke in early October (about 1.5 to 2.0 months from now). I get the impression that they feel comfortable that the long-hole stope mining permit is not far away. The timing is consistent with the info that was included in the Deutsche Bank agreement. As mentioned before, info in the Deutsche Bank document (SEDAR, January 14`10) has an estimate for the long-hole stope mining permit being granted 150 days after the Lamaque exploration permit has been granted. The exploration permit was granted in early May, thus 150 days probably brings us to about end of September timeframe. As such, starting long-hole mining at the Bedard Dyke in early October would be reasonable.
They now have a contractor focused on the Bedard Dyke development work (from the NR):
``....and an underground mine contractor has been hired to advance the development of the Bedard dyke.``
Hopefully they still have plans to process some of the Bedard Dyke bulk samples (as we have been expecting all along) at some point between now and the start of long-hole (as we know, they are currently permitted for the bulk samples). Perhaps they will pull the bulk sample tonnage once they start drilling. At least we know a drill station has been completed (from the August presentation):
``BedardDyke portal opened with access driven into mineralized zone, drill station completed and ramp commenced``
5) Staffing is starting to shape up (from the MD&A rpt, Outlook section):
``Lamaque mine staffing is almost complete, and the company is reviewing candidates for the general manager of the Québec mining division. As the Bedard Dyke is opened up, additional employees, contractors and support staff will be hired. Due to the operation of the new fleet of new low-profile underground equipment, a significant amount of training is ongoing and will assist in obtaining the full complement of hourly and staff workforce from the Val d’Or area.``
6) Of note, our current monthly prepaid gold commitment to Deutsche Bank is 667 ounces. It will be a while until it increases. The next monthly increase is not until June 2012, when it goes to 1,425 ounces per month. From the Deutsche Bank ``AMENDMENT AGREEMENT`` document (January 14`10, SEDAR):
``e. The definition of `Scheduled Monthly Quantity` as set forth in the Gold Purchase Agreement is hereby deleted and replaced in its entirety with the following:``
```Scheduled Monthly Quantity` means: (i) for Monthly Delivery Dates falling in the months of January 2010 to May 2010, inclusive, 200 Ounces of Gold per Monthly Delivery Date; (ii) for Monthly Delivery Dates falling in the months of June 2010 to May 2012, inclusive, 667 Ounces of gold per Monthly Delivery Date; and (iii) for Monthly Delivery Dates falling in the months of June 2012 to December 2014 inclusive, 1,425 Ounces of Gold per Monthly Delivery Date; Any portion of the Contract Quantity not otherwise required to be delivered hereunder shall be Delivered on the Monthly Delivery Date occurring in the month of December 2014.``
4 comments:
It is curious to me that there is so much comment on this board, yet the last two conference calls have had fewer than five questions from listeners. Je regrette that I missed the call yesterday ... unfortunately had other things to do. Pity, though-there are so many ideas floated here that could certainly stand a bit of color from management.
I still feel that we are being watched with some skepticism by the Bay Street crowd - though I think they missed the boat yesterday by not asking a few questions themselves. More analyst participation on the call would have been encouraging. Watching the stock price yesterday was very instructive-strong selling on the news release and through the day, then quite a bit of buying after the call and into the close.
One of the old problems at Sigma was highly variable ore grade. It sounds as if this is still posing some challenges for the crew-though I gather from Adrian's rather inconclusive answers that they are addressing the issue with at least some success. Hopefully we will continue to process the flats along with new material - while this may lower the head grade somewhat overall, the price of gold at present makes processing low grade ore something of a mandate.
The employment and equipment pictures are more encouraging than last quarter, to say the least. As the days tick by, we get closer to delivery on our mining gear - hopefully we'll have a full staff by the time everything has arrived (along with the LHS permit). I very much look forward to seeing who gets hired for the GM position - not to mention the CEO.
It is both refreshing and disappointing to see our 2010 production schedules downsized: disappointing because we'd like to think we could overcome the various delays and get the cash...but refreshing in the straightforward manner in which this has been announced. This should go some way in silencing some of the criticism about "secretive" management. Besides, from what I've seen this year, I'll be willing to wager that we do a bit better than the new projections by year end.
In any event, have a great weekend - I'm taking PK's cue and enjoying the last weekend before school starts with my kids!
My response to Chillby's question regarding the minimal # of questions considering the ongoing dialogue that has taken place on this blog, is that the Century progress report was released by Century Management at 8:31 am on Friday/13 also advising the conference call at 2:00 pm "Eastern" time. This only gave investors and interested parties (such as analysts) 5 1/2 hours to rearrange their schedules, do research, prepare questions..... especially on a Friday. My Management experience has taught me that if you want to control the agenda of a meeting, call a snap meeting and bring "your" paper to the meeting. End result ....... the meeting is "yours". I plan to contact Peter Ball on Monday to express my concerns in this regard especially considering all that has occurred since the AGM and the accomplishments that have taken place at Lamaque. We have a very knowledgeable participant base on this Blog and I especially applaud, with thanks, Production05.
A one week separation between the release of the Progress Report and the conference call ...... I may even have asked a question.
Dennis, in Fredericton, N.B.
Simple question: What was A. M. referring to when on several occasions he used the term "dilution"
Mixing low grade with high grade ore?
Thanks
Peter
Fair enough, Dennis- though a similar lack of questions were present at the last cc in June, despite much more difficult circumstances. Your point is well taken, though. A bit more notice would have been a better thing - at least we're on time, and it isn't as if the office staff have a great deal of time on their hands just now.
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