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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: sageyrain who wrote (22226)	10/4/2006 1:12:47 AM
From: E. Charters	Read Replies (1) of 78420

KGI is a mine in a longish development mode. Most of what they do is large scale xplorashun (new gold camp word) of far flung lenses of the 4 mine system that was the main break. They do a lot of explo. most mines in produckshun (also new gold camp word) do about 25% xplorashun. KGI does maybe 38%. Also they are in development of a mining method. Short a few miners. Short about 300 tpd of what they should produce and changing mining methods to try to find a low dilution way of extracting ore from sublevel vert drill on 5.5 foot wide shallow dip stopes. This is not easy. I think their dilution has been about 50% or more so far. They are wackin it down, but it is a larnin' thing. KGI in near term partly full swing should be running about 1500 tpd. At full tilt they should be at about 4500 tpd. ( 5 years?). This will take some doing. They will also need about 6 million tons reserves for this. They can get there no problem, but they need to change profit pikshure (street word) in about one and a half more years roughly. IF you compare KGI to a total-loss drilling-an-orebody-maybe company, they are in a far better situation. They know they have an orebody. They just have to scale it up to do that ore thing. Should they be able to make money at 0.375 opt - 500 tpd? Well, yes. But If I were on a drill off of a potentially 20 million ounce orebody, and I were running a 200 ounce per day orebody, I would assume a 45,000 a day profit. 16 mill a year. hoookay.. so lets say 5 drills running at surface and ten underground. That is 1600 feet per day @ 23 and 900 feet @ $13 = 48,500. Whoops! Where is the profit? Well nobody likes paying taxes anyway and there is an orebody to build. EC<:-}

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