He came across as a forward thinker.
He gave the impression that he is focused on stabilizing the operation in the here and now, but I also got the impression he has his thinking cap on with regards to how to create future value for shareholders.
This is what a good CEO does. A good CEO is able to multi-task with exception competency (i.e. putting out significant fires while simultaneously pouncing on opportunities to transform the company into something much bigger and better for shareholders).
I heard the CEO - once or twice - (on the conference call) hint that the company plans to increase tpd beyond that 2000 tpd level (likely staggered small steps over time). He didn`t hint of a timeframe - could be a year from now or 2 years or 3 years. It is also not clear as to if he has formulated a plan in his mind as yet as to which locations to pull the increased ore from on the Lamaque property (or whether he is thinking of a possible satellite feed). However, I could tell that he has his thinking cap on and thinking about how to transform the company into something bigger and better in the future.
8 comments:
After listening to the audio recording of the recent CC and mixed with some extrapolations/imaginations, the followings are my impressions:-
1) After a few adjustments to the speaker, he went off in his boomimg voice giving his views on current CMM n answering all the questions particularly those pertaining to the mining fronts with conviction n right to the point w/o hesitation, bait & shift or beating around the bush. He did not once referred any question, be it technical or otherwise, to be answered by another person. If one did not know, it did give the impression that was not a one-month old CEO giving his first co CC. On the contrary, one could pass it off as a co's seasoned CEO giving one of his umpteen CCs.
2) The revealation he was already in the co's operating committee last yr (not sure for how long) totally surprised me. It gives me the impression he already was well informed about the co n particularly all things that were happening in the mining fronts before he was pronounced CEO. He read Lamarque Flats, BD and North Wall like some pages he was doing revisions on.
3) I particularly like the fact that he is a trained mining engineer. IMO the one paramount important issue with CMM right now is mine performance and this 2011 is critical n may well be a defining yr when things evolved successfully. In the matter of delegation I always like the idea that the need to delegate to one's deputy is coz the person does not have the time to handle the dayly details of the work n not that he is not well versed with it. As such, IMHO, if he is an accountant, however brillant he may be, will not be the best qualifications I would like to see in the new CEO at this critical, technical intensive, mine-development-stage of the co.
All in all, I feel he is the man with the right attributes to be the new CEO for current CMM. As for strength of character, I have no idea. Incidentally, he sounds Scottish to me n for what I know, Scotts make pretty tough soldiers. Anyway the market has voted and the verdit is, Yes, he is the man.
Hi Prod05
Your mention of a possible satellite feed to increase tpd sounds like there are more behind the idea. Like to hear more if U may. Cheers!
Hi Wingfong,
I wasn`t thinking of anything in particular or anything too special.
In terms of potential satellite feeds, the company`s Sigma II property is about 20 - 25 km away. It was a past open pit producer (satellite feed) for Placer Dome. The deposit is still open at depth. It is impossible to know (without appropriate exploration and assessment) if it now has to be mined via u/g methods or if open pit mining is still possible or if it can handle both. As hinted, it needs to be drill tested and economically assessed. Ore feed from Sigma II would likely a couple of years away, even if they were to add it as an exploration / development project in 2011.
Other satellite options would be acquiring an advanced (pure) gold property within 60 miles (or so) trucking distance of Lamaque or entering into a J/V for a property within the same radius.
With regards to things they can do on the Lamaque property, they could try to access some of the ounces slightly lower down (if the ounces are close enough to be reached via the Lamaque 2 decline). They would likely need to do a bit of dewatering to accomplish this.
They haven`t mentioned much about ounces in the Cross-Over section. I think it accounts for about 1.7 million of the current 43-101 ounces (I think the make up is something like .6M M&I and 1.1 Inferred). Those ounces were not built into the original 3 year mine plan. I think the intention was to drill and development those ounces for production around year 4 (I`m going all from memory here). I think the idea was/is to access those ounces via the Lamaque 2 decline (perhaps after mining in the Lamaque Flats have been completed). I don`t know if it`s possible to bring the Cross-Over area into production feed ahead of schedule, in order to exceed current mine plan. Cross-Over would likely require a lot of exploration work to upgrade the ounces to higher resource categories.
We`ll see what ideas the new CEO comes up with over time.
Hi Prod05
Tks for your explaination. Just for discussion, what about just buying the necessary matellugically-compatible ore from some smaller mines which do not have milling facilities to push the co's mill all the way to its 5000tpd designed capacity? In this way,the co may buy from as many such mines as possible without getting involved with the running of those mines n when our own production improves with more tonnage, such buying of outside ore may then be flexibly reduced to suit.
Hi Wingfong,
Being a custom mill provider to tiny exploration companies in the area is probably a good concept with $1,400 gold, as oppose to leaving 1/3 of the mill capacity unutilized. This would probably only work best for the short-term though.
Here is the primary advantage: It would bring down the mill processing cost per ounce, due to economies of scale from full utilization - would only make financial sense short-term until the company is able to fully ramp up 100% with its own in-house ore).
Here is a disadvantage:
Custom milling will likely only provide about $200 - 300 in profit per custom milled ounce (depending on the agreement. For example, Dynacor Gold Mines, in Peru, tells the market that they are aiming to produce 30,000 ounces per year through 100% custom milling (the market goes nuts and increases Dynacor`s share price from $.30 to $2.00 over a few months). Dynacor has no 43-101 ounces of their own (they have a nice land package about 25 km away from our San Juan property, but they have chosen to do no work on it over the years - they are focused on another exploration property in another region). The 30,000 ounce production total can be deceptive for investors that do not fully understand Dynacor`s model. They have a type of sliding price agreement with their ore suppliers. In other words, as the gold price goes up, so does Dynacor`s payout for the ore (i.e. probably $1,000 or $1,100 per oz type cash cost, at this gold price). As such, dynacor`s profit margin does not increase significantly with the gold price - the ore suppliers are the ones that realize most of the advantages with upward movements in gold price. Dynacor`s increased profits are more dependent on more suppliers bring ore to them (ie. increasing ounces from 20,000 to 30,000).
Of note, for their quarter ending Sept. 30`11, their realized gold price was $US1,235 and their operating cost per oz was $US1,007. In other words, their gross margin per oz was only $US228. This is before paying for Corp G&A, capital maintenance, etc.
On the other hand, the Val d`Or could provide for a better custom milling contract - all depends on supply and demand in the area.
At the end of the day, it seems as if it is far more profitable for Century to find a way increase its own ore supply than to provide a custom milling service, unless they can get a far better custom milling contract (only for the short-term) than the Dynacor contract.
Let`s see what ideas the new CEO comes up with to fully utilize the 3000 tpd mill, after he directs us to safer grounds (and 2000 tpd steady state production). Let`s hope they can truly hit the 2000 tpd mark by mid year this year.
Hi Production,
Gallahad metals (GAX) is about 22km away and my buddy Larry Hoover is on the BoD there. The property there is called Regcourt and used to be a small production mine. They just did a 9 hole initial drill program there and had some very good success: 5m of 19.2g/t and 79.37g/t over 3.6m. Of course this is very early and I know they have just cashed up and have now over $1M in the treasury so CMM may want to keep an eye on results there. I would be interested in your thoughts about that property as a potential ore feed for CMM. There is a shaft already in place but no idea on condition.
Hi Prod05 (& other fellow bloggers); I agree with your impressions (formed on the basis of the CC) of the CEO. My question is: is he going to be "his own man" (i.e. chart a course for CMM based on his own vision/ideas, etc). My guess is that he will be. Judging by his brief CV, he is around 50 years of age. So this position offers him the opportunity to make CMM into a significant mid-tier producer, and cap off his career with a great success story.
I wonder where his residence is (probably Vancouver, I guess). It will be interesting to see when he will take action on moving the head-office from Blane. GLTA!
Scola did something with his common shares also. He is now showing a reduction of 4,900,000 common shares - transaction date is Feb. 8`11, and SEDI filled date is Feb. 11`11. Transaction code used is ``Other``, exact code used for the Finskiy common share reduction from a few days ago. It shows no sale price, also similar to the Finksiy situation.
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