Friday, September 10, 2010

2 key ramp up points - last 3.5 months of 2010

1) Bedard Dyke is targeted to start supplying ore to the mill in early October.

October starts in 21 days. If they are unable to bring the Bedard Dyke online come early October or even mid October then I am hoping they can get it started in November. I would like to see BD onstream early in October (as currently anticipated), naturally, but worst case scenario I would like to see it in production by start of December 2010. The month of December is the month I have been keying on all along. I would like to see the Bedard Dyke feeding at least 200 - 400 tpd to the mill in December.

Hopefully, with us currently working on, these 2 following items signifies that we are not too far away from being in a position to extract ore (either via bulk sampling, which we know for sure we are permitted to do, or full scale long-hole stope mining):

*``ramp being development for ore extraction levels``

*``mineralization definition drilling commenced``


2) It looks like we are still expecting the North Wall Zone to be producing ore by the end of December 2010.

``Tonnage is forecasted to increase in Q4 2010 from the advancement of Lamaque Flats zone, and commencement of mining from Bedard Dyke and North Wall zones``

It would be good if the North Wall could come onstream and provide at least 50 - 200 tpd to the mill in December.


December 2010 tpd potential:


Base case (if Lamaque Flats keeps up current pace, and if both BD and NW come online by December):

1,000 tpd Lamaque + 300 tpd BD + 100 tpd NW = 1,400 tpd December 2010

This would give us a good kick start into 2011.


Stretch target:

1,000 tpd Lamaque + 400 tpd BD + 200 tpd NW = 1,600 tpd December 2010

3 comments:

Wingfong said...

Prod05

Without the relevent figures from the Sept release, I know U have to take a leap of faith using some estimates. As such, assuming the 1400tpd is achieved in Dec, doea it also mean that the reduced production figure of 30,000oz/2010 will likewise be achieved too? Your view please.

Keith said...

Hi Guys, this was the response from Peter Ball for the lack of new info. on September presentation

" There is nothing to report that is material at this moment as the company continues with stope development and Bedard development.

LAMAQUE continues to mine in the flats and expect mining in q4 in Bedard and then subsequently in the northwall zone where we expect to fk inally be able to increase tonnage once these zones are opened which have been delayed by the geotechnical for Bedard, delay in mine equipment delivery.


The mine is playing catchup on all fronts to get ahead in development and thus the delivery of mined tonnage.

The mill is fully upgraded and working wonderful and awaits the mine to open the new mined areas for delivery of tonnes.

The tonnage hovers lower than expected but is expected to take the required jump in q4 and we are still expected to to meet our guidance of 25 to 30k at LAMAQUE in 2010

Day to day right now is immaterial as long as we continue with our mine plan to open the mine the way we have planned.

I see a good q4 as all the above comes together but until then we are behind and tpd etc does not tell the picture as it will mislead readers and not define the true picture over the next few months.

Call me next week and we can chat.

I will be copying this exact email to other folks who email me.

Thanks for your patience."



So they are still expecting the 25 - 30k oz for 2010.

production05 said...

Hi Wingfong,

Good question. I think it depends on how early Bedard Dyke comes onstream. If they get it going solidly in early to mid October then we have a good chance of hitting the revised 2010 production target range of 25,000 - 30,000 ounces. If BD start up gets further delayed then it will depend on how much of a delay.

As the end of the day, I am not as concerned with the 2010 start up numbers (although another push back in starting up BD would be yet another short term downer) as I am with the tpd levels in December. The mid-term (H1 2011) performance is the key to determining the level of success for this company. Good numbers in December would go a long way:

1) in us maybe reaching commercial production at the end of February or end of March

2) in us maybe being able access the remaining C$9M in escrow in maybe February or March (if we choose to access the funds)

3) in us eliminating the Lamaque start up guarantee agreement around March (San Juan has been pledged as collateral, but we can easily eliminate that agreement completely with 4 consecutive months of Lamaque, alone, demonstrating annualized run rate production of 70,000 ounces - not every month, but average of the sum of the 4 consecutive months)

Anyway, below is the profile I posted on the blog on August 15th. Again, whether they can achieve these numbers, or even their own target production ounces for 2010, will depend how quickly and how solidly Bedard Dyke comes onstream.

Here is my post from August 15th:

``We don`t know the exact current grade, but let`s use 3.8 g/t as the foundation grade and then build it up a tiny bit each month as the operation progresses in 2010 due to training and experience, further optimization, new equipment arrival (at some point) and ore feeds from additional areas (especially Bedard Dyke bulk samples and start up of long-hole mining) - the grade build up I am using is likely extremely conservative:

Jun - 4.37 g/t (actual)
Jul - 3.80 g/t (using the mid point of the initial start up grade range)
Aug - 3.80 g/t (using this as the go forward foundation grade)
Sep - 3.90 g/t
Oct - 4.10 g/t (long-hole mining of the Bedard Dyke expected to start)
Nov - 4.30 g/t
Dec - 4.50 g/t


Tonnes per day:

Mar - 115 tpd (actual)
Apr/May - 265 tpd (actual)
Jun - 450 tpd (actual)
Jul - 820 tpd (actual)
Aug - 1,000 tpd (almost at this level in the first half of August)
Sep - 1,100 tpd
Oct - 1,200 tpd (long-hole mining of the Bedard Dyke expected to start)
Nov - 1,300 tpd
Dec - 1,400 tpd


Produced ounces at Lamaque in 2010 (with 96% recovery going forward):

Mar - 0 ounces
Apr/May - 1,961 ounces (actual)
Jun - 1,870 ounces (actual)
Jul - 2,885 ounces (blind estimate using 3.8 g/t grade)
Aug - 3,500 ounces
Sep - 3,970 ounces
Oct - 4,550 ounces (long-hole mining of the Bedard Dyke expected to start)
Nov - 5,175 ounces
Dec - 5,800 ounces

Total, Lamaque 2010 (using the above assumptions) = 29,711 Ounces

Revised target range, Lamaque 2010 = 25,000 to 30,000 ounces