production05 responded as follows
Hey John,
1) Sigma- I think 20,000 ounces is reasonable for Q2. It could end up being fairly conservative, especially if they are able to complete the waste removal job by late April or early May, and if they have been successful in addressing whatever issues they were experiencing with the shovels.
2) Lamaque – we should perhaps go with a range of 2,000 – 4,000 ounces for Lamaque in Q2, even though they will be processing the 15 g/t (or greater) ore during the initial stages of production. Right now it is completely a guessing game as there are a lot of variables that will ultimately influence Q2’s output. It sounds like there is a good chance they will get the mining permit by mid April (but nothing is guaranteed until permit is in hand, as we clearly know from the Peru experience). That should enable them to start mining immediately (or at least not long afterwards), but that is only part of the production process. It might take a little bit of time to reach the gold pouring stage.
Also, while producing gold from the bulk samples, they also have to spend time interpreting the results to determine the appropriate numbers (i.e. cut off grades) to use for Lamaque reserve calculations. They will also need to identify optimal performance levels for Lamaque and then fine tune the process in order to reach those levels. As a result of all this, the production ramp up will be staggered, especially in the early stages.
San Juan – I think 3,000 ounces is a very good number to use for Q2. Mill development at SJ appears to be progressing very well right now. In January they posted on the website that they were processing ore at a rate of 120 tpd. Apparently, that number is now 250 – 270 tpd, but they are still in the process of getting the head grade and recovery rate back up to historical levels. I expect the 250 – 270 tpd to grow further during Q2, as they are aggressively working on this. I also expect both head grade and recovery to improve. As a result, there is a good chance the ounces will be pushed above 3,000 for Q2. Remember, this is strictly a Q2 view. Based on the 120 tpd posted on CMM’s website in Junuary, coupled with not being at historical levels as yet for head grade and recoveries, I suggest that we should expect relatively low SJ production numbers for both Q4 and Q1.
Hope this helps a little.
Production05
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