<<What exactly do you mean?>> While that is a fair question, one missed the subtle point and wandered way off topic by suggesting that anyone would think that an individual (McEwen) could 'magically change the geology.' I'll give you the benefit of the doubt that you didn't intend to have this discussion degenerate into some kind of pissing contest. I'll explain my point in detail.
Yes, at present Magistral is a high cost mine. However it is key to figure out why the mine is high cost: are they chasing uneconomical ore, do they have in inefficient mining & extraction processes, are labor costs too high, are there other opportunities to lower operational costs? While geology may be the primary factor is not the only factor involved in a profitable mine.
If memory serves, part of the success at Red Lake was tossing out the union (in a long strike) in order to get work rule changes, as well as other modernizations and upgrades to help lower the production cost. I assume McEwen knows quite a few competent/top notch mine operator types, and thus perhaps the potential exits for some real operational changes to lower the $/oz production costs.
Might be that they need major capital improvements? This of course makes the assumption that Hottman and company are more exploration oriented and that there are improvements lying around. I wonder what the Mine Manager from DEZ's mine could do with operational costs at Magistral? Did NPG employ the 'best and the brightest' to evaluate the 'kit' and operate the mine? Success at Red Lake was achieved by breaking the mold in exploration and other wise, perhaps it is time to do the same at Magistral?
Now before one points out that NPG did a mine improvement study, I’ll ask as to the scope of that study? What it just to improve the EXISTING process or to look at the mine as a whole and evaluate the process as if it were a virgin site? I suspect the former was the focus; look at what can be ‘fixed’ with the existing plant. But what if one used the “Red Lake” model and broke the mold, assumed nothing and re-examine the entire place?
The gold concentrations in the Magistral ores look to be on the order of 2.0 g/t, which is entirely acceptable, though at the lower end of economically feasible. Certainly there are tens of companies touting their drill results at grades near or less than 2.0 g/t. In fact DEZ's reserves/feed have an average grade of ~2.11 g/t and DEZ operates a profitable mine.
Second I note that the geology on other parts of the property looks pretty good too. The La Prieta Zone has concentrations of 8.47, 9.4 and 15.76 g/t. Other sites show good potential too.
So perhaps under different management Magistral will have new life. Though with McEwen's NV focus, I suspect he'll jettison Magistral. Might make a nice parting gift to Hottman & Company, like the GRC stuff was to the Reids?
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