Golden Phoenix Reports on Ashdown Mine Development and Molybdenum Production
Thursday September 6, 8:30 am ET
SPARKS, Nev., Sept. 6 /PRNewswire-FirstCall/ -- Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM - News) is pleased to report that operational efficiencies continued to improve through the second quarter as production capability was expanded at its majority owned Ashdown Project LLC business unit, operated through a joint venture with Win-Eldrich Mines Ltd. Development work at Ashdown has been ongoing, with full-scale production from multiple stope headings targeted for early 2008.
During the second quarter of 2007, the Ashdown Project LLC posted sales of molybdenum concentrates totaling $4,466,395, which represents an increase of over $3.6 million, or 460%, from its first quarter sales. Operating costs and expenses for the second quarter were $2,276,789, compared to $1,680,068 for the first quarter reflecting an acceleration in budgeted staffing from approximately twelve to twenty-four miners and from approximately nine to eighteen milling and support personnel, as well as other costs related to the ramp up in production.
The advancement in development at both the mine and mill resulted in a total of 144,882 pounds of molybdenum (Mo) being sold in the second quarter at a cost of $15.71 per pound as compared to 64,942 pounds at $25.87 per pound during the first quarter. These per-pound calculations represent fully loaded, total costs that include ore production, barren-rock development, general and administrative expenses, accretion, depreciation and amortization expenses.
The second quarter earnings demonstrate that the systematic ramp-up beyond initial budgeted expenditures over the past six months is resulting in a transition to profitability. As the Project evolves from a focus on infrastructure development to concurrent mining of multiple stopes, an increase in the production and sale of concentrates, together with a decrease in the Project's total cost per pound is expected. Until then, ongoing development work and equipment upgrades and repairs during the current third quarter are expected to reduce financial performance and the rate of expanded production in the third quarter, but will position the Project for sustainable full-production rates later in the year.
The Project's fleet of rolling stock has recently been expanded with the acquisition of a second 10-ton haul truck and a third 2-yard mucker. These additions allow for rotation of equipment through a preventative maintenance program designed to increase equipment life, availability and output. By maintaining high safety standards, implementing preventative maintenance and upgrading equipment, lower unit costs and higher rates of production are expected.
The grinding circuit's ball mill was taken off-line in early August to replace worn portions of the protective rubber plates that line the inside of the drum. Preventative maintenance items were moved forward and have been performed in preparation for sustained 24/7 operation once the custom fabricated replacement liner has been installed, scheduled in the first part of September.
This unplanned down-time has slowed the increase in the rate of production for the period of time effected. In return, it has provided the opportunity to implement improvements to the flotation circuit, including design and construction of a system to re-process tailings in order to recover residual moly from the tailings pond. Following several days of trial operation, these innovations are resulting in moly recoveries from the tailings pond ranging from 45-94%, with an average of 83%.
Due to the exceptional head grades of the ore at Ashdown, the recycled tailings deliver feed ranging from 0.2 to 0.9% Mo (with an average of 0.51% Mo). Such grades are higher than most primary ore from comparable moly operations, allowing recovery of between 500 and 1500 pounds of concentrate per shift. Safety procedures require that hydraulic suctioning of material from the tailings pond occur only during daylight hours. Lot 11 will be sold this week with half of its 12 Supersacks comprised of moly recovered from the tailings pond.
As anticipated, concentrates produced from the tailings contained lower Mo and higher copper (Cu) compared to concentrates produced from fresh ore. No suppression of Cu was attempted since the tailings were run for quantity of saleable material, with the quality of the product being a secondary consideration. The buyer is levying an industry-standard price adjustment, termed a "penalty", of 5.4% in the case of Lot 11 to compensate for Mo and Cu being out of specification with the brokerage contract. The value of the resulting provisional sale is $557,900.
Underground, both ore extraction and development work have continued throughout this period. Over 3600 tons of ore have been stockpiled in advance of the re-start of the ball mill anticipated in September. With the accumulation of a month's worth of mill feed, underground crews are now focusing on upgrading the underground electrical systems, rehabilitating timber support where needed, fireproofing the portal entrance area, and advancing the construction of a secondary escape way in accordance with recent MSHA directives. Excavation and stockpiling of ore continue in anticipation of sustained mill operation through the remainder of the year, once the ball mill is returned to service.
Please visit the Golden Phoenix website at golden-phoenix.com
Golden Phoenix Minerals, Inc. is a Nevada-based mining company committed to deliver value to its shareholders by acquiring, developing and mining superior precious and strategic metal deposits in North America using competitive business practices balanced by principles of ethical stewardship. Golden Phoenix owns the Mineral Ridge gold and silver property near Silver Peak, Nevada, the Northern Champion molybdenum mine in Ontario, Canada, and is manager/operator and majority owner of the Ashdown Project LLC gold and molybdenum property held jointly by Golden Phoenix Minerals, Inc. and Win-Eldrich Mines, Ltd. of Toronto, Canada through its US subsidiary, Win-Eldrich Gold, Inc.
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