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Gold/Mining/Energy : Royal Oak-RYO

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To: Al Cern who wrote (954)5/7/1998 3:13:00 AM
From: Michael Bidder  Read Replies (2) of 1706
 
Could you comment on the following?

I assume that Kemess must have a state of the art grinding operation for this type of operation. However I understand that semi-autogenous grinding mills can consume metal in the form of crushing balls or the like. These parts are an expensive part of a milling operation if the rock is hard. Expensive to buy and to transport if the operation is remote.

Werner Nennecker, President of Bankrupt Pegasus Gold, said during a conference call that the Mount Tod grinding operation was not able to meet design specifications and therefor was run at a higher speed to increase throughput. This had the adverse effect of increasing maintenance costs. I assume the consumption of metal balls and associated milling parts. Also electrical consumption was increased.

Is it true that in a large marginal bulkable type operation if one phase of the operation doesn't meet design specifications then the end result, can be disastrous to the bottom line?

Thanks,
-Michael Bidder
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