1) The 3 drill holes drilled at the end of May. Century`s in-house assay lab is open, therefore much quicker turnaround time. It`s not clear if Century will release any results though. I don`t think the first few holes are ``sexy`` type holes (like the Bedard Dyke holes), although these holes should be very good for mine planning purposes. I think they are just drilling ahead of the mining, in the Lamaque flats. It should also help them with building the mining reserves in the flats (in addition to provide valuable info for actual mining and development of stopes).
The drilling might become more interesting to the casual (jump around) market audience once they start with the discovery test holes (i.e. test to see if the BD mineralization bumps into north dippers that were mined in the open pit days, test to the north of the BD where there was historical mining and mineralization is thought to still remain).
2) The updated SJ 43-101 report
Also, it`s almost mid June. It means that almost 1.5 months has elapsed of the estimated 5 months for the long-hole stoping permit. That means the estimate is now 3.5 months before we get the permit. It would be nice if the crown pillar study is ahead of schedule. If we get a nice surprise and get the permit say in month 3.5 or 4.0 (instead of month 5.0) then that would be very positive. Long-hole stope mining (of the BD and the North Wall) is what is going enable us to drive out really nice cash cost per ounce.
Sunday, June 13, 2010
Thursday, June 10, 2010
Just a very minor side note - Hecla`s Greens Creek (high grade) polymetallic mine in the Juneau area
This is just some minor fyi info, as Century will likely not be doing anything with our Alaskan properties for a long long long time into the future (but you never know for sure). This info is very facinating nonetheless (check out the $ value of the Greens Creek Mine - below).
Greens Creek is a high grade polymetallic mine in production in the Juneau area. It is located about 30 km (or so) from Century`s own polymetallic property. Greens Creek is owned 100% by Hecla Mining. Hecla has been in business for about 100 years (I think one of the oldest mining companies in America), yet the CEO says that Greens Creek is by far the best mine Hecla has ever owned.
Hecla use to own 29.7% but increase their ownership to 100% in 2008. They paid Rio Tinto US$750M for the remaining 70.3%. It means that 100% of Greens Creek (a Juneau area polymetallic mine) was valued at about US$1.1 billion at the time of the transaction.
``The Greens Creek orebody contains silver, zinc, gold and lead, and lies adjacent to the Admiralty Island National Monument, an environmentally sensitive area.``
``Greens Creek is an underground mine which produces approximately 2,100 tons of ore per day. The primary mining methods are cut and fill and longhole stoping. The ore is processed on site at a mill, which produces lead, zinc and bulk concentrates, as well as gold doré. In 2009, ore was processed at an average rate of approximately 2,167 tons per day. During 2009, mill recovery totaled approximately 72% silver, 79% zinc, 69% lead, and 64% gold.``
Greens Creek`s (probable) reserves show grades of:
*12.1 opt silver
*0.1 opt gold
*3.6% lead
*10.3% zinc
Attached is a link to the Greens Creek profile on Hecla`s website. I highly recommend watching the short video about Greens Creek (link is at the middle of the Hecla page). The CEO is very excited about what they have there in Alaska. He really likes the geologic potential of the area.
http://www.hecla-mining.com/hmc_prop_greenscreek.html
Greens Creek is a high grade polymetallic mine in production in the Juneau area. It is located about 30 km (or so) from Century`s own polymetallic property. Greens Creek is owned 100% by Hecla Mining. Hecla has been in business for about 100 years (I think one of the oldest mining companies in America), yet the CEO says that Greens Creek is by far the best mine Hecla has ever owned.
Hecla use to own 29.7% but increase their ownership to 100% in 2008. They paid Rio Tinto US$750M for the remaining 70.3%. It means that 100% of Greens Creek (a Juneau area polymetallic mine) was valued at about US$1.1 billion at the time of the transaction.
``The Greens Creek orebody contains silver, zinc, gold and lead, and lies adjacent to the Admiralty Island National Monument, an environmentally sensitive area.``
``Greens Creek is an underground mine which produces approximately 2,100 tons of ore per day. The primary mining methods are cut and fill and longhole stoping. The ore is processed on site at a mill, which produces lead, zinc and bulk concentrates, as well as gold doré. In 2009, ore was processed at an average rate of approximately 2,167 tons per day. During 2009, mill recovery totaled approximately 72% silver, 79% zinc, 69% lead, and 64% gold.``
Greens Creek`s (probable) reserves show grades of:
*12.1 opt silver
*0.1 opt gold
*3.6% lead
*10.3% zinc
Attached is a link to the Greens Creek profile on Hecla`s website. I highly recommend watching the short video about Greens Creek (link is at the middle of the Hecla page). The CEO is very excited about what they have there in Alaska. He really likes the geologic potential of the area.
http://www.hecla-mining.com/hmc_prop_greenscreek.html
Wednesday, June 9, 2010
I wonder what Mr. Daniels think about the potential of these 2 extremely minor Century properties
Mr. Daniels` property exploration round up is expected to be completed in 90 days. He will probably not consider these 2 properties as they are likely too minor. Though, I would like to see him perform an assessment on them. I would like to know his thoughts.
1) Aumaque Mine (Val d`Or)
It is located about 2 - 3 km from the Lamaque mill. It has non-43101 ounces of 50,000 (8.57 g/t grade) and 17,000 (6.03 g/t grade). The property has never been mined but it has a shaft that goes down to 165m and a winze from 150m to 198m. It also has a number of levels established.
``The mineralization was found to be consistent in style with the vein types found at the Lamaque mine in pyroclastic volcanics.``
``At the west end of the property and extending onto the Lamaque property there is an untested diorite plug similar to the Numbers 4 and 5 plugs found at Lamaque. It has been previously suggested that the known veins may extend into this plug with the result that a fractured and mineralized system similar to those mined at Lamaque may have developed.``
If the known Aumaque veins are found to actually extend into the untested diorite plug on the west end, I wonder what Mr. Daniels thinks about the 67,000 historical Aumaque ounce total maybe increasing to, say, 400,000 ounces.
2) Sweetheart Property (Juneau, Alaska)
There was a major (precedence setting) supreme court decision in 2009 that went in favour of Coeur d'Alene Mines. It allowed Coeur to begin mining their Juneau area mine. This precedence setting decision has likely made exploration and mining a lot more favourable for other companies with properties around the Juneau area (although, risks from environmentalists will likely always exist, but hopefully to a far lesser degree due to the supreme court decision).
Century has 8 properties in the area, with all of the properties having solid potential. Treadwell was the largest mining operation in the world about 90 to 110 years ago. It produced 3.2 million ounces prior to the flood. Exploration holes (4 holes) done in the 1990s provides a hint that millions of ounces likely still remain - the 4 holes hit significant mineralization 1,300 ft below previous mine workings. The Treadwell veins are mesothermal veins also. With mesothermal type veins, the grades continue to increase with depth.
The Yakima property is located 450m west of and parallel to the Treadwell mine. The properties are thought to be related due to their close proximity and similar geology to each other.
However, the property I am curious about the most is the Sweetheart Property. It`s a polymetallic property. It has several polymetallic targets identified. The property was tested in 1978 by a company called Mapco Minerals. The exploration program included 16 shallow diamond drill holes which returned Cu to 1.4%, Zn to 3.2%, Pb to 1.7%, Ag to 1.3 opt (40.3 g/t), and Au to 0.27 opt (8.37 g/t) - best results in each of the individual metal categories. The best drill hole intersection was 3 metres (10 ft) 1.1% Cu, .62% Zn, 1.7% Pb, .58 opt (17.98 g/t) Ag, and 0.27 opt (8.37 g/t) Au. I haven`t seen the results for the other 15 individual drill holes.
The Sweetheart mineralization extends over 12,600 feet (4 km) strike length.
It would be nice to get an assessment from Mr. Daniels about this property. Again, I am not expecting it to be included in the 90 day round up release (as it is too minor of a property for Century), but nevertheless it looks like a fascinating exploration property to me. Being polymetallic, it`s a property that can potentially stand the test of time - not dependent on a high gold price.
1) Aumaque Mine (Val d`Or)
It is located about 2 - 3 km from the Lamaque mill. It has non-43101 ounces of 50,000 (8.57 g/t grade) and 17,000 (6.03 g/t grade). The property has never been mined but it has a shaft that goes down to 165m and a winze from 150m to 198m. It also has a number of levels established.
``The mineralization was found to be consistent in style with the vein types found at the Lamaque mine in pyroclastic volcanics.``
``At the west end of the property and extending onto the Lamaque property there is an untested diorite plug similar to the Numbers 4 and 5 plugs found at Lamaque. It has been previously suggested that the known veins may extend into this plug with the result that a fractured and mineralized system similar to those mined at Lamaque may have developed.``
If the known Aumaque veins are found to actually extend into the untested diorite plug on the west end, I wonder what Mr. Daniels thinks about the 67,000 historical Aumaque ounce total maybe increasing to, say, 400,000 ounces.
2) Sweetheart Property (Juneau, Alaska)
There was a major (precedence setting) supreme court decision in 2009 that went in favour of Coeur d'Alene Mines. It allowed Coeur to begin mining their Juneau area mine. This precedence setting decision has likely made exploration and mining a lot more favourable for other companies with properties around the Juneau area (although, risks from environmentalists will likely always exist, but hopefully to a far lesser degree due to the supreme court decision).
Century has 8 properties in the area, with all of the properties having solid potential. Treadwell was the largest mining operation in the world about 90 to 110 years ago. It produced 3.2 million ounces prior to the flood. Exploration holes (4 holes) done in the 1990s provides a hint that millions of ounces likely still remain - the 4 holes hit significant mineralization 1,300 ft below previous mine workings. The Treadwell veins are mesothermal veins also. With mesothermal type veins, the grades continue to increase with depth.
The Yakima property is located 450m west of and parallel to the Treadwell mine. The properties are thought to be related due to their close proximity and similar geology to each other.
However, the property I am curious about the most is the Sweetheart Property. It`s a polymetallic property. It has several polymetallic targets identified. The property was tested in 1978 by a company called Mapco Minerals. The exploration program included 16 shallow diamond drill holes which returned Cu to 1.4%, Zn to 3.2%, Pb to 1.7%, Ag to 1.3 opt (40.3 g/t), and Au to 0.27 opt (8.37 g/t) - best results in each of the individual metal categories. The best drill hole intersection was 3 metres (10 ft) 1.1% Cu, .62% Zn, 1.7% Pb, .58 opt (17.98 g/t) Ag, and 0.27 opt (8.37 g/t) Au. I haven`t seen the results for the other 15 individual drill holes.
The Sweetheart mineralization extends over 12,600 feet (4 km) strike length.
It would be nice to get an assessment from Mr. Daniels about this property. Again, I am not expecting it to be included in the 90 day round up release (as it is too minor of a property for Century), but nevertheless it looks like a fascinating exploration property to me. Being polymetallic, it`s a property that can potentially stand the test of time - not dependent on a high gold price.
Monday, June 7, 2010
Bigjohn37
Hi bigjohn, hope all is well.
I am not familiar with the track record of the new VP Geology. However, I really like Century`s approach. Century`s focused has always been on at least somewhat medium stage ore bodies but primarily advanced stage projects. Mr Daniels` skillsets appear to be ideal for the job. He not only brings exploration expertise, but he also has experience with mine modeling, economic resource estimation and project evaluation. These are skills that can help us with both maximizing our existing properties and evaluating projects for external growth (once we reach that stage).
His top priority is our Lamaque complex. However, after he looks at Lamaque he will also be assessing our existing properties surrounding Lamaque (outside of the complex). The land package is large and there are a number of good exloration areas on those properties as well (with good historical exploration drill holes already).
He will also be performing assessments on our other properties as well, perhaps including our NWT property (with its 15 km strike length) and our 8 (Juneau area)Alaskan properties.
Of course, he will be looking at San Juan also. Here is a comment from Century (May 14`10 NR):
``The San Juan project has the opportunity to create a major mining district based on the results of previous exploration work.``
It sounds like Century`s geologists (maybe even Mr. Daniels) are liking the potential at San Juan.
I have always felt that our San Juan project has been severely under appreciated by the market. Off the top of my head, here are only 3 reasons for the lack of appreciation (IMO):
1) SJ is a small scale producer
2) The market`s misunderstanding of SJ`s narrow veins
3) No porphyry stockwork resource profile delineated as yet
I am not sure how many people realize this but SJ has produced well over 1 million ounces of gold historically (including estimates from the periods of poor record keeping). Yet, there have only been 51 drill holes (ever) made on the entire project. That`s probably unheard of for any million ounce producing property anywhere in the entire world.
The SJ veins successfully mined historically have typically been between 10 to 80 cm range. Of note, 100 cm equals 1 meter (I believe). SJ veins fall into the category of high grade, narrow veins, but that doesn`t mean it can`t be hugely productive. We are also going into a new phase of mining equipment efficiency, with the new low profile equipment now being utilized elsewhere, to mine narrow veins. As SJ grows (and becomes larger scale) there may be a cost/benefit advantage down the road to purchase new low profile equipment for the SJ operation (especially with mining the primary veins). We also shouldn`t forget about bringing electrical power to SJ. This will make the operation much more efficient also. The power line is currently only 15 km away. It must have gotten closer or something. It was 20 km away just a couple of years ago. Good to see progress (potentially). I read an article in March which stated that Century is trying to convince the Peru government to split the cost of bring the power to SJ. I think that`s only fair, as Peru citizens along the way can tap into the power lines also - everyone benefits. However, I don`t know if the gov`t agrees or not.
The SJ project has 2 primary types of ore bodies:
1) Vein systems (typically high grade, narrow veins)
2) Porphyry stockwork systems (my guess is that the grade only needs to be in the 1 g/t to 2 g/t range, or maybe even below 1 g/t, to be economical because it will likely be mined with some sort of bulk mining approach or maybe a low grade high tonnage approach)
The SJ part of the project has a swarm vein system, with about 25 - 30 known veins (and counting). There are 2 primary veins (SJ and Mercedes) that have accounted for most of the production, but there are other veins in production also. The SJ part of the property (with the SJ swarm vein system) is only a relatively small part of the total SJ project land package.
Veta Clara is another vein system, located about 5 km away from the milling operation. Veta Clara has about 7 or 8 veins, and, at least one (maybe more) of those veins are now in production currently.
Santa Clarita is another prospect also. I think it might have both vein potential and stockwork potential (although I am not fully clear or at least I don`t fully remember). No drill holes as yet though, therefore it`s not something we should rely on at this time. What is interesting though is that it is located next to Veta Clara and we know that Veta Clara is producing gold.
We already know about the potential of Erika perhaps turning into porphyry copper system - again, no drill holes as yet.
Century has looked at Champune a few different ways in the past. They believe they finally understand the structure, and they now believe they have a firm handle on where the gold might be located. ``Stockworkin granodiorite intruded by andesitic dykes containing gold adjacent to the margin of the dykes`` I have breifly read about somewhat similar deposits like this. The theory might be somewhat common. However, at this point it is only a theory with regards to Champune. There has been on drill holes thus far. As such, it still has to be proven.
Lily-La Huaca has potential also. I think it`s a vein system. I think they have very little data on it though - far less data than even the other properties in the SJ land package. Naturally, no drill holes thus far.
One important note about the SJ veins (especially the primary producing veins - SJ and Mercedes): Examination of the veins determined that the veins appear to be mesothermal in nature and therefore can be expected to continue at far greater depth that is currently being mined at this time. Apparently, mesothermal type veins, like our SJ veins, typically go very deep, not just in Peru but in locations in other places around the world.
Hopefully Mr. Daniels can use his expertise to maximize all of these opportunities for Century shareholders.
With regards to the AGM, I will not be attending. As a side note, it has been moved back to Vancouver (just in case anyone had scheduled to attend it in Toronto).
I am not familiar with the track record of the new VP Geology. However, I really like Century`s approach. Century`s focused has always been on at least somewhat medium stage ore bodies but primarily advanced stage projects. Mr Daniels` skillsets appear to be ideal for the job. He not only brings exploration expertise, but he also has experience with mine modeling, economic resource estimation and project evaluation. These are skills that can help us with both maximizing our existing properties and evaluating projects for external growth (once we reach that stage).
His top priority is our Lamaque complex. However, after he looks at Lamaque he will also be assessing our existing properties surrounding Lamaque (outside of the complex). The land package is large and there are a number of good exloration areas on those properties as well (with good historical exploration drill holes already).
He will also be performing assessments on our other properties as well, perhaps including our NWT property (with its 15 km strike length) and our 8 (Juneau area)Alaskan properties.
Of course, he will be looking at San Juan also. Here is a comment from Century (May 14`10 NR):
``The San Juan project has the opportunity to create a major mining district based on the results of previous exploration work.``
It sounds like Century`s geologists (maybe even Mr. Daniels) are liking the potential at San Juan.
I have always felt that our San Juan project has been severely under appreciated by the market. Off the top of my head, here are only 3 reasons for the lack of appreciation (IMO):
1) SJ is a small scale producer
2) The market`s misunderstanding of SJ`s narrow veins
3) No porphyry stockwork resource profile delineated as yet
I am not sure how many people realize this but SJ has produced well over 1 million ounces of gold historically (including estimates from the periods of poor record keeping). Yet, there have only been 51 drill holes (ever) made on the entire project. That`s probably unheard of for any million ounce producing property anywhere in the entire world.
The SJ veins successfully mined historically have typically been between 10 to 80 cm range. Of note, 100 cm equals 1 meter (I believe). SJ veins fall into the category of high grade, narrow veins, but that doesn`t mean it can`t be hugely productive. We are also going into a new phase of mining equipment efficiency, with the new low profile equipment now being utilized elsewhere, to mine narrow veins. As SJ grows (and becomes larger scale) there may be a cost/benefit advantage down the road to purchase new low profile equipment for the SJ operation (especially with mining the primary veins). We also shouldn`t forget about bringing electrical power to SJ. This will make the operation much more efficient also. The power line is currently only 15 km away. It must have gotten closer or something. It was 20 km away just a couple of years ago. Good to see progress (potentially). I read an article in March which stated that Century is trying to convince the Peru government to split the cost of bring the power to SJ. I think that`s only fair, as Peru citizens along the way can tap into the power lines also - everyone benefits. However, I don`t know if the gov`t agrees or not.
The SJ project has 2 primary types of ore bodies:
1) Vein systems (typically high grade, narrow veins)
2) Porphyry stockwork systems (my guess is that the grade only needs to be in the 1 g/t to 2 g/t range, or maybe even below 1 g/t, to be economical because it will likely be mined with some sort of bulk mining approach or maybe a low grade high tonnage approach)
The SJ part of the project has a swarm vein system, with about 25 - 30 known veins (and counting). There are 2 primary veins (SJ and Mercedes) that have accounted for most of the production, but there are other veins in production also. The SJ part of the property (with the SJ swarm vein system) is only a relatively small part of the total SJ project land package.
Veta Clara is another vein system, located about 5 km away from the milling operation. Veta Clara has about 7 or 8 veins, and, at least one (maybe more) of those veins are now in production currently.
Santa Clarita is another prospect also. I think it might have both vein potential and stockwork potential (although I am not fully clear or at least I don`t fully remember). No drill holes as yet though, therefore it`s not something we should rely on at this time. What is interesting though is that it is located next to Veta Clara and we know that Veta Clara is producing gold.
We already know about the potential of Erika perhaps turning into porphyry copper system - again, no drill holes as yet.
Century has looked at Champune a few different ways in the past. They believe they finally understand the structure, and they now believe they have a firm handle on where the gold might be located. ``Stockworkin granodiorite intruded by andesitic dykes containing gold adjacent to the margin of the dykes`` I have breifly read about somewhat similar deposits like this. The theory might be somewhat common. However, at this point it is only a theory with regards to Champune. There has been on drill holes thus far. As such, it still has to be proven.
Lily-La Huaca has potential also. I think it`s a vein system. I think they have very little data on it though - far less data than even the other properties in the SJ land package. Naturally, no drill holes thus far.
One important note about the SJ veins (especially the primary producing veins - SJ and Mercedes): Examination of the veins determined that the veins appear to be mesothermal in nature and therefore can be expected to continue at far greater depth that is currently being mined at this time. Apparently, mesothermal type veins, like our SJ veins, typically go very deep, not just in Peru but in locations in other places around the world.
Hopefully Mr. Daniels can use his expertise to maximize all of these opportunities for Century shareholders.
With regards to the AGM, I will not be attending. As a side note, it has been moved back to Vancouver (just in case anyone had scheduled to attend it in Toronto).
Saturday, June 5, 2010
Friday, June 4, 2010
I would like to see them hit 900 tpd at some point in July
Ideally, at some point in July, I would like to see them hit 1,000 tpd, the targeted grade of 4.76 and the targeted recovery range of 94% - 96%. If this level gets sustained over a 4 consecutive month period (coupled with contributions from SJ) it should be good enough to access the next US$8.5M cash from escrow.
However, without more updates from the company, it is hard for me to visualize them (at this time) getting to that level in July (even late July).
Nonetheless, I think numbers slightly below that level might be possible (at some point in July) IF THEY EXECUTE. I would like to see them now take a very progressive step with the numbers. It`s time to step up and toss away the list of excuses. This is the right time as key components are in place. In July (at some point) I would like to see them hit 900 tpd, and average 4.0 g/t grade with a 95% recovery rate. If they do this then both ounces and cash from operations will contribute decently.
Here is the possible breakdown:
*400 tpd now
*150 tpd from new stopes in production in June (in development at May EOM)
*150 tpd gain from all of the low profile equipment now being in place
*200 tpd from BD bulk sample mining
400 + 150 + 150 + 200 = 900 tpd
(or some combination of all that)
Hopefully the new BD ore and ore from the other new Lamaque (flats) stopes will lift the overall grade to 4.0 g/t.
In August, I would like to see them reach 1,100 tpd and 4.5 g/t. This might be sufficient to get them back on track to access the US$8.5M eventually, in my view.
However, without more updates from the company, it is hard for me to visualize them (at this time) getting to that level in July (even late July).
Nonetheless, I think numbers slightly below that level might be possible (at some point in July) IF THEY EXECUTE. I would like to see them now take a very progressive step with the numbers. It`s time to step up and toss away the list of excuses. This is the right time as key components are in place. In July (at some point) I would like to see them hit 900 tpd, and average 4.0 g/t grade with a 95% recovery rate. If they do this then both ounces and cash from operations will contribute decently.
Here is the possible breakdown:
*400 tpd now
*150 tpd from new stopes in production in June (in development at May EOM)
*150 tpd gain from all of the low profile equipment now being in place
*200 tpd from BD bulk sample mining
400 + 150 + 150 + 200 = 900 tpd
(or some combination of all that)
Hopefully the new BD ore and ore from the other new Lamaque (flats) stopes will lift the overall grade to 4.0 g/t.
In August, I would like to see them reach 1,100 tpd and 4.5 g/t. This might be sufficient to get them back on track to access the US$8.5M eventually, in my view.
Thursday, June 3, 2010
Double checked info - expected timeframe for long-hole stoping permit
I was going from off the top of my head last night - I couldn`t remember if it was 150 days or 180 days (I wanted to be conservative until verifying). I planned on going back to SEDAR to doubled check the expected timeframe. It`s a bit of good news. The Jan 14th document states 150 days (not 180 days):
``Issuance of permit expected 150 days after issuance of Lamaque Exploration permit.``
It may not sound like a lot, but it is very meaningful. The 150 days converts to 5 months, essentially (instead of 6). The Lamaque Exploration permit was granted at the end of April. Of the 5 months, 1 month has already elapsed. We start mining BD in July, as such 2 of the 5 months will be elapsed come the start of July. It means that we will only have 3 more months (at that point) before the long-hole stoping permit is expected. It means that the 20,000 tonne BD bulk sample only has to sustain us for 3 months (July to September) before we can potentially get into full scale mining of the BD. Perhaps Century can apply for a 10,000 tonne bulk sample add on (then mine 10,000 tonnes per month from BD for the 3 month period).
There is still also a chance that we can get our long-hole stoping permit early. I think that things are mainly dependent on finalizing the crown pillar study. Best I can tell (from the various documents), all of the preliminary stages have gone very well over the past couple of years on the crown pillar study.
Century will be performing a lot of the development work ahead of actually receiving the permit. For example, the exploration drifts will not only help us to explore but will be used to reach the long-hole mining areas soon after we get the permit.
From the BD NR in early May: ``The development of the exploration drifts will be used in preparation for mining, which will commence upon completion of the crown pillar study.``
Century will likely still need to develop the long-hole stope itself once the permit is granted, but I think it helps a lot that the portal, the decline, the drifts, etc. will already be in place prior to the permit being granted. They can probably hire the people and purchase the equipment in advance also (i.e. the long-hole drill that is arriving in a wk or 2). It shouldn`t take us too much longer after that point to get going with long-hole stoping of the BD. Mind you, they will likely also need to put in the crown pillar before they mine under the hwy. It`s not clear when they will reach that stage though. It`s not clear if they will be able to perform some long-hole stope mining prior to reaching the ore located under the hwy.
I view long-hole stope mining as being huge for us. I view it as almost a form of bulk mining (in my mind anyway), with low cash cost per oz potential. You can check out the World Gold Council`s description of the long-hole stope mining method (middle of page). It comes with a small diagram also:
http://www.trustingold.com/production/mining-methods/
``Issuance of permit expected 150 days after issuance of Lamaque Exploration permit.``
It may not sound like a lot, but it is very meaningful. The 150 days converts to 5 months, essentially (instead of 6). The Lamaque Exploration permit was granted at the end of April. Of the 5 months, 1 month has already elapsed. We start mining BD in July, as such 2 of the 5 months will be elapsed come the start of July. It means that we will only have 3 more months (at that point) before the long-hole stoping permit is expected. It means that the 20,000 tonne BD bulk sample only has to sustain us for 3 months (July to September) before we can potentially get into full scale mining of the BD. Perhaps Century can apply for a 10,000 tonne bulk sample add on (then mine 10,000 tonnes per month from BD for the 3 month period).
There is still also a chance that we can get our long-hole stoping permit early. I think that things are mainly dependent on finalizing the crown pillar study. Best I can tell (from the various documents), all of the preliminary stages have gone very well over the past couple of years on the crown pillar study.
Century will be performing a lot of the development work ahead of actually receiving the permit. For example, the exploration drifts will not only help us to explore but will be used to reach the long-hole mining areas soon after we get the permit.
From the BD NR in early May: ``The development of the exploration drifts will be used in preparation for mining, which will commence upon completion of the crown pillar study.``
Century will likely still need to develop the long-hole stope itself once the permit is granted, but I think it helps a lot that the portal, the decline, the drifts, etc. will already be in place prior to the permit being granted. They can probably hire the people and purchase the equipment in advance also (i.e. the long-hole drill that is arriving in a wk or 2). It shouldn`t take us too much longer after that point to get going with long-hole stoping of the BD. Mind you, they will likely also need to put in the crown pillar before they mine under the hwy. It`s not clear when they will reach that stage though. It`s not clear if they will be able to perform some long-hole stope mining prior to reaching the ore located under the hwy.
I view long-hole stope mining as being huge for us. I view it as almost a form of bulk mining (in my mind anyway), with low cash cost per oz potential. You can check out the World Gold Council`s description of the long-hole stope mining method (middle of page). It comes with a small diagram also:
http://www.trustingold.com/production/mining-methods/
Interpretations and comments
1) Lamaque mining appears to be 1.5 to 2 months behind schedule, largely due to delays with arrival of the essential (critical) new low-profile equipment. Peggy says that the new jumbos and scoops (loaders) are working ``fabulously``. She says it will revolutionize the industry, with regards to mining narrow veins.
2) They are currently mining entirely from the Lamaque flats. BD bulk sample mining is not expected to start up until July. Gold currently being mined in the flats can be categorized as follows:
i) Stope ore that was already included as reserves – represents 50% of what is being mined, which they believe is coming in with a grade around 4.5 g/t
ii) They are mining and crushing some of the waste muck. They are already mining in the area and have to move the wastes anyway and the gold price is $1,200 per ounce. This may not work at $800 gold, but it might help to pay some bills at $1,200 gold. The gold in waste material, that is being processed, has a minimum grade of .5 g/t, but likely averages somewhere in the 1.0 to 2.0 g/t range. They say that the waste muck being mined represents about 1/3 or the tonnage going through the milling process. Let`s say that this represents 33%.
iii) They are also finding that the ore areas (being mined) continue within the veins - even after already mining what was identified in reserves. This would therefore represent stope area gold (similar to point i above), but not previously counted in reserves. There seems to be continuation in the veins of all the stopes they have thus far opened up. It`s also not clear if the grade is also within the 4.5 g/t area. I guess by default it sounds like this represent 17% (100% - 50% - 33%) of what is currently being mined.
In the Jan`09 bankable report, it was identified that we would likely find low grade non-reserve ounces (in the path) that could be economically mined. As such, I am not surprised of the findings after actually mining the flats. The Lamaque flats are comprised of mainly narrow vein high grade ore, but has low grade loose change as well (as we can see). If the gold price is high enough and the mining teams are efficient, theoretically they should be able to pick up some of these low grade ounces economically as they are already mining in the area (no extra development work and they should be right in the path).
3) 1,800 ounces of gold produced at Lamaque so far. This is from 19,161 tonnes process thus far, which includes the 1/3 from low grade muck being run through the crusher.
Prior to the mill circuit being shut down, the circuit normally carried about 2,000 to 2,500 ounces as inventory. In addition to the 1,800 ounces already produced, the Lamaque circuit currently carries an additional 1,000 ounces. They expect the circuit inventory total to go back up to 2,000 ounces before settling in at that level on a continuous basis. I don`t know exactly how it works, but there is usually build up in the circuit that accounts for the inventory. They had cleaned out the circuit when it was last shut down. This new inventory build is happening naturally as they have cranked things up again. Now, most likely not all of the 1,800 ounces produced and the 1,000 ounces currently in mill circuit inventory is from current mining. I say this because the company was carrying X number of Lamaque inventory all along (since the last shut down), although I don`t know where they were storing those ounces given the mill clean that occurred. Maybe they moved the ounces back for mill circuit storage after the mill had been cleaned up. Either way, we should keep in mind that it is likely that not all of the 2,800 ounces were from new mining efforts.
4) They are currently doing 400 tpd at Lamaque. That is probably the key (starting point) number to work with when trying to assess the ramp up situation.
``Additional stopes to opened in June 2010 with increased production anticipated``
There were 4 stopes in production at the end of May. There are 3 additional stopes in development at the end of May. It`s not clear if at least 1 of the 3 development stopes is in the BD (or if all 3 are incremental to BD). Either way, it sounds like there is soon to be more than 4 production stopes at the Lamaque flats in the near future. This should increase tonnage beyond the 400 tpd level.
``Production expected to increase due to low-profile underground equipment became operational later than expected at the end of May 2010``
It`s not clear how much of the low-profile equipment gains have already been built into the 400 tpd EOM number. If the low-profile equipment is making a ``fabulous`` impact (as Peggy claims) it would be extremely disappointing and operationally devastating if this new equipment (alone) doesn`t push the 400 tpd number to a much higher level.
``Work continues on Bedard Dyke portal access; expect to ramp to zone by July 2010 and additional tonnage to be added to production profile``
The 20,000 bulk sample tonnes from BD starting in July (hopefully not too much longer than a month from now) should help to push the 400 tpd higher. The ore grade from BD should be good also. As they are mining the 20,000 sample tonnes, I would like to see them apply for a permit extension to mine another 20,000 sample (once they`ve mined the first 20,000). I don`t know if they are allowed to do this though. They did manage to increase the original 15,000 tonne request up to 20,000.
I would like for them to make this request because it will likely be a while before we get our long-hole stoping permit to fully mine the BD and the North Wall. Per the Jan. 14 DB agreement on SEDAR, the long-hole stoping permit is not expected until 180 days after the Lamaque exploration permit is granted. The Lamaque exploration permit was granted around the end of April. If we stick to what is in the DB agreement then we will not get the long-hole stoping permit until beginning of November (5 months from now). We need to ensure we can find a way to mine the BD continually from July to October. Maybe they are planning to stretch the 20,000 bulk sample throughout that 4 month period. That would equate to 167 tpd from BD for the 4 month period. It would be 333 tpd from BD if they mine the 20,000 tonnes over 2 months, which probably makes more sense. Peggy said that BD would represent 40% of production (let`s hope she means near-term) and then 50%-60% at full BD mining.
Although, Peggy said something on the conference call that was odd. She said that they recently purchased a long-hole drill and it will be arriving in a week or 2. Now, I am not exactly clear why they would need a long-hole drill right now when the long-hole stoping permit is not expected for another 5 months. Hopefully they are anticipating that the permit will arrive much earlier.
5) ``Exploration Drilling started end of May 2010; 3 holes completed to date for 500+ meters``
Our in-house assay lab is now up and running. One would think that means quick turnaround time. They will probably still need to send out some assays to independent labs, but that should only be about 10%. With the in-house lab, let`s hope that Century will be in a position to release results from the first 3 holes in about 2 weeks or so.
It sounds like the first few drill holes are focused on drilling the Lamaque flats ahead of mining. If so, this should provide more near-term mining certainty and provide better mine plan expectations. It should also help to add ounces to reserves.
6) Updated SJ 43-101 report expected at some point in the next little while. The last one was a couple of years ago so they will have to remove ounces mined. However, they should be able to increase the net numbers. To be honest, I really didn`t understand what the independent person was thinking when he prepared the last report. He was super conservative I think, to the point where it didn`t make any basic sense to me. His team used an average reserve grade of 8.87 g/t for SJ, even though they know that SJ operates at an average grade of around 6.5 g/t (before the report and after the report). It`s obvious that SJ operator mixes the high grade ore with the low grade ore to get to the very economical 6.5 g/t average. The 43-101 preparer likely left out a lot of the lower (very economical) grade ore from the last 43-101 report.
Those ounces are even more economical today. The gold price was US$800 back then. The gold price is now 50% higher today, at US$1,200.
As you can see, there should be at least a couple of opportunities to improve the 43-101 resource profile relative to what was published in the past.
7) Century received the US$5M Performance Hurdle A amount at the end of April (a month ago), but I am still concerned about the cash situation. The 1.5 to 2 month operations delay will likely subsequently delay access to the next US$8.5M from escrow. They need to do a run rate of 70,000 ounces of production for 4 consecutive months in order to access the US$8.5M. Even though they can use the SJ ounces in the calc, I don`t see 400 tpd at Lamaque as cutting it. Even if they reach 4.7 g/t planned grade, they still need Lamaque to contribute close to 1,000 tpd for 4 consecutive months. At best, we are looking at mid Q4 before we can access the US$8.5M. There are tonnes of costs we need to address way before then, including daily operating costs, significant accounts payables, BD development, exploration, Corporate G&A, development of the North Wall starting in Q4, etc.
If it was strictly the management team of the past, without Finskiy and Scola and company, I would be concerned about this being a serious issue. However, that`s not the case this time around. I am concerned, but I don`t see it as a problem. There WILL eventually be a solution. As a first stage remedy, I would like to see Finskiy and Scola convert $5M of their $15M worth of warrants.
8) The DB prepaid gold sales payment increases to 667 ounces per month starting in June (from 200 per month from Jan to May). I am not concerned because we can supply the ounces from SJ if the 1.5 to 2 Lamaque delay has impacted our abilities at Lamaque.
2) They are currently mining entirely from the Lamaque flats. BD bulk sample mining is not expected to start up until July. Gold currently being mined in the flats can be categorized as follows:
i) Stope ore that was already included as reserves – represents 50% of what is being mined, which they believe is coming in with a grade around 4.5 g/t
ii) They are mining and crushing some of the waste muck. They are already mining in the area and have to move the wastes anyway and the gold price is $1,200 per ounce. This may not work at $800 gold, but it might help to pay some bills at $1,200 gold. The gold in waste material, that is being processed, has a minimum grade of .5 g/t, but likely averages somewhere in the 1.0 to 2.0 g/t range. They say that the waste muck being mined represents about 1/3 or the tonnage going through the milling process. Let`s say that this represents 33%.
iii) They are also finding that the ore areas (being mined) continue within the veins - even after already mining what was identified in reserves. This would therefore represent stope area gold (similar to point i above), but not previously counted in reserves. There seems to be continuation in the veins of all the stopes they have thus far opened up. It`s also not clear if the grade is also within the 4.5 g/t area. I guess by default it sounds like this represent 17% (100% - 50% - 33%) of what is currently being mined.
In the Jan`09 bankable report, it was identified that we would likely find low grade non-reserve ounces (in the path) that could be economically mined. As such, I am not surprised of the findings after actually mining the flats. The Lamaque flats are comprised of mainly narrow vein high grade ore, but has low grade loose change as well (as we can see). If the gold price is high enough and the mining teams are efficient, theoretically they should be able to pick up some of these low grade ounces economically as they are already mining in the area (no extra development work and they should be right in the path).
3) 1,800 ounces of gold produced at Lamaque so far. This is from 19,161 tonnes process thus far, which includes the 1/3 from low grade muck being run through the crusher.
Prior to the mill circuit being shut down, the circuit normally carried about 2,000 to 2,500 ounces as inventory. In addition to the 1,800 ounces already produced, the Lamaque circuit currently carries an additional 1,000 ounces. They expect the circuit inventory total to go back up to 2,000 ounces before settling in at that level on a continuous basis. I don`t know exactly how it works, but there is usually build up in the circuit that accounts for the inventory. They had cleaned out the circuit when it was last shut down. This new inventory build is happening naturally as they have cranked things up again. Now, most likely not all of the 1,800 ounces produced and the 1,000 ounces currently in mill circuit inventory is from current mining. I say this because the company was carrying X number of Lamaque inventory all along (since the last shut down), although I don`t know where they were storing those ounces given the mill clean that occurred. Maybe they moved the ounces back for mill circuit storage after the mill had been cleaned up. Either way, we should keep in mind that it is likely that not all of the 2,800 ounces were from new mining efforts.
4) They are currently doing 400 tpd at Lamaque. That is probably the key (starting point) number to work with when trying to assess the ramp up situation.
``Additional stopes to opened in June 2010 with increased production anticipated``
There were 4 stopes in production at the end of May. There are 3 additional stopes in development at the end of May. It`s not clear if at least 1 of the 3 development stopes is in the BD (or if all 3 are incremental to BD). Either way, it sounds like there is soon to be more than 4 production stopes at the Lamaque flats in the near future. This should increase tonnage beyond the 400 tpd level.
``Production expected to increase due to low-profile underground equipment became operational later than expected at the end of May 2010``
It`s not clear how much of the low-profile equipment gains have already been built into the 400 tpd EOM number. If the low-profile equipment is making a ``fabulous`` impact (as Peggy claims) it would be extremely disappointing and operationally devastating if this new equipment (alone) doesn`t push the 400 tpd number to a much higher level.
``Work continues on Bedard Dyke portal access; expect to ramp to zone by July 2010 and additional tonnage to be added to production profile``
The 20,000 bulk sample tonnes from BD starting in July (hopefully not too much longer than a month from now) should help to push the 400 tpd higher. The ore grade from BD should be good also. As they are mining the 20,000 sample tonnes, I would like to see them apply for a permit extension to mine another 20,000 sample (once they`ve mined the first 20,000). I don`t know if they are allowed to do this though. They did manage to increase the original 15,000 tonne request up to 20,000.
I would like for them to make this request because it will likely be a while before we get our long-hole stoping permit to fully mine the BD and the North Wall. Per the Jan. 14 DB agreement on SEDAR, the long-hole stoping permit is not expected until 180 days after the Lamaque exploration permit is granted. The Lamaque exploration permit was granted around the end of April. If we stick to what is in the DB agreement then we will not get the long-hole stoping permit until beginning of November (5 months from now). We need to ensure we can find a way to mine the BD continually from July to October. Maybe they are planning to stretch the 20,000 bulk sample throughout that 4 month period. That would equate to 167 tpd from BD for the 4 month period. It would be 333 tpd from BD if they mine the 20,000 tonnes over 2 months, which probably makes more sense. Peggy said that BD would represent 40% of production (let`s hope she means near-term) and then 50%-60% at full BD mining.
Although, Peggy said something on the conference call that was odd. She said that they recently purchased a long-hole drill and it will be arriving in a week or 2. Now, I am not exactly clear why they would need a long-hole drill right now when the long-hole stoping permit is not expected for another 5 months. Hopefully they are anticipating that the permit will arrive much earlier.
5) ``Exploration Drilling started end of May 2010; 3 holes completed to date for 500+ meters``
Our in-house assay lab is now up and running. One would think that means quick turnaround time. They will probably still need to send out some assays to independent labs, but that should only be about 10%. With the in-house lab, let`s hope that Century will be in a position to release results from the first 3 holes in about 2 weeks or so.
It sounds like the first few drill holes are focused on drilling the Lamaque flats ahead of mining. If so, this should provide more near-term mining certainty and provide better mine plan expectations. It should also help to add ounces to reserves.
6) Updated SJ 43-101 report expected at some point in the next little while. The last one was a couple of years ago so they will have to remove ounces mined. However, they should be able to increase the net numbers. To be honest, I really didn`t understand what the independent person was thinking when he prepared the last report. He was super conservative I think, to the point where it didn`t make any basic sense to me. His team used an average reserve grade of 8.87 g/t for SJ, even though they know that SJ operates at an average grade of around 6.5 g/t (before the report and after the report). It`s obvious that SJ operator mixes the high grade ore with the low grade ore to get to the very economical 6.5 g/t average. The 43-101 preparer likely left out a lot of the lower (very economical) grade ore from the last 43-101 report.
Those ounces are even more economical today. The gold price was US$800 back then. The gold price is now 50% higher today, at US$1,200.
As you can see, there should be at least a couple of opportunities to improve the 43-101 resource profile relative to what was published in the past.
7) Century received the US$5M Performance Hurdle A amount at the end of April (a month ago), but I am still concerned about the cash situation. The 1.5 to 2 month operations delay will likely subsequently delay access to the next US$8.5M from escrow. They need to do a run rate of 70,000 ounces of production for 4 consecutive months in order to access the US$8.5M. Even though they can use the SJ ounces in the calc, I don`t see 400 tpd at Lamaque as cutting it. Even if they reach 4.7 g/t planned grade, they still need Lamaque to contribute close to 1,000 tpd for 4 consecutive months. At best, we are looking at mid Q4 before we can access the US$8.5M. There are tonnes of costs we need to address way before then, including daily operating costs, significant accounts payables, BD development, exploration, Corporate G&A, development of the North Wall starting in Q4, etc.
If it was strictly the management team of the past, without Finskiy and Scola and company, I would be concerned about this being a serious issue. However, that`s not the case this time around. I am concerned, but I don`t see it as a problem. There WILL eventually be a solution. As a first stage remedy, I would like to see Finskiy and Scola convert $5M of their $15M worth of warrants.
8) The DB prepaid gold sales payment increases to 667 ounces per month starting in June (from 200 per month from Jan to May). I am not concerned because we can supply the ounces from SJ if the 1.5 to 2 Lamaque delay has impacted our abilities at Lamaque.
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