CMM Projections
from a poster on Stockhouse ....
just read the BOLD parts ....
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Production Potential at Sigma Lamaque in 2007
Now that the company has committed resources to underground operations, let's take a stab at a potential 2007 projection for combined Sigma open pit and Lamaque production ounces.
From an earlier post ,........
stockhouse.ca
Let's use the following charts for the Sigma open pit operations from that post.
With daily production of 4000 tpd
4000tpd x 1.5gpt = 6000g/day x 96% recovery rate = 5760g / 31.1g/oz = 185.2 oz/day
4000tpd x 2.0gpt = 8000g/day x 96% recovery rate = 7680g / 31.1g/oz = 243.7 oz/day
4000tpd x 2.5gpt = 10,000g/day x 96% recovery rate = 9600g / 31.1 g/oz = 308.7 oz/day
4000tpd x 3.0gpt = 12,000 g/day x 96% recovery rate = 11,520g / 31.1 g/oz = 370 oz/day
4000tpd x 3.5gpt = 14,000 g/day x 96% recovery rate = 13,440g / 31.1 g/oz = 432.1 oz/day
With daily production at 5000 tpd
5000tpd x 1.5gpt = 7500g/day x 96% recovery rate = 7200g / 31.1 g/oz = 231.2 oz/day
5000tpd x 2.0gpt = 10,000g/day x 96% recovery rate = 9600g / 31.1 g/oz = 308.7 oz/day
5000tpd x 2.5gpt = 12,500g/day x 96% recovery rate = 12,000g / 31.1 g/oz = 385.8 oz/day
5000tpd x 3.0gpt = 15,000g/day x 96% recovery rate = 14,400g / 31.1 g/oz = 463 oz/day
5000tpd x 3.5gpt = 17,500g/day x 96% recovery rate = 16,800g / 31.1 g/oz = 540 oz/day
So let's use the 4000 tpd at 2.0 gpt. That's 243.7 oz per day of production. Now give the company the benefit of 14 days of mill downtime due to mechanical problems.
243.7 x 350 days = 85,295 oz.
Now for some reasonable projections from underground.
centurymining.com
Let's only use the measured and indicated resource category numbers of 3,923,000 tonnes grading 4.99 gpt for a total of 630,000 oz of potential resources. Round off the 4.99 gpt to an even 5 gpt for simplicity sake, seeing as the historical grade mined from Lamaque was a little higher as stated in the news release .... "1935 to 1985 with total mine production of approximately 24.2 million tonnes of ore at an average grade of 5.81 g/t gold for a total of 4.55 million ounces of gold."
Richmont Mines has recently announced production start up at one of the nearby East Amphi mine which was also once part of the McWatters fold before they went bankrupt.
biz.yahoo.com
Say we use a dilution factor of 20% for the underground mining of these potential resource ounces at Lamaque. Ore grade dilution will probably lower, at maybe 10% but let's use 20% being conservative.
80% x 5 gpt = 4 gpt .
1000tpd x 4.0 gpt = 4,000g/day x 96% recovery rate = 3840g / 31.1 g/oz = 123.5 oz/day
2000tpd x 4.0 gpt = 8,000g/day x 96% recovery rate = 7680g / 31.1 g/oz = 247 oz/day
If we only use the main Sigma Mill capacity of 5000 tpd then we can reasonably expect 123.5 oz of production a day x 350 days (again 14 days of mill downtime assumed) = 43,225 oz
If the company can get the maximum capacity of 6000 tpd including the rod mill we could expect 247 oz of production a day x 350 days = 86,450 oz per annum.
Totalling the Sigma open pit ounces running 4000 tpd of ore of 85,295 oz. and then adding in the remaining Sigma mill capacity of 1000 tpd from Lamaque underground ore would give Century a potential production capability of about 128,520 oz per year.
If we go with the maximum capacity of 2000 tpd including the use of the rod mill, we’d potentially have 86,450 oz from Lamaque underground giving Century a potential production capability of about 171,745 oz per year.
Let’s just keep in mind the actual historical grade averages were a little higher and we are using a little higher ore dilution grade than will probably be experienced.
As far as costs for underground mining go, let’s use C$45 per tonne. Could be higher, could be lower. But I think it’s in the right ballpark based on some other operations nearby.
Recovering one ounce of gold from Lamaque underground using 4 gpt head grade and a 96% recovery rate would require approx 8 tonnes of material to be mined and milled.
$45 x 8 tonnes = C$360 per ounce cost
C$360 x $0.85 exchange = about US$306 per ounce.
So if the company can reach and maintain it’s estimated production costs in the Sigma pit of US$325 and using my hypothetical costs for underground we may be able to assume that average cash costs per ounce from Sigma and Lamaque in 2007 could be around US$310 /oz
As for potential cash flow in 2007 ……
Using US $550 average price of gold - $310 cash costs = US$240 per ounce and using 5000 tpd throughput
US$240 / oz x 128,520oz = US$30,844.800 cash flow
Using US $550 average price of gold - $310 cash costs = US$240 per ounce and using 6000 tpd throughput
US$240 / oz x 171,745oz = US$41,218,800 cash flow
Plug in your own numbers for higher or lower gold prices. Again, these are only my hypothetical numbers based on what we have seen from the company’s publically filed information. I could be way off, could be fairly close. As always, do your own D.D.
"We're nose down....ass up at Sigma"
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