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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?


To: Andrew who wrote (1119)12/6/2003 4:19:29 PM
From: Northern Marlin  Respond to of 48092
 
Thanks for posting the 3rd Q 03 press release, Andrew. I'd read it before I wrote to Landen at AEM.

Here are the salient passages from the press release:

A number of initiatives have been undertaken to accelerate the drilling, blasting and extraction cycle. These include the addition of two production drills acquired with the Bousquet purchase, increasing drill hole diameter, the blasting of stopes in one mass blast rather than four separate blasts and using electronic detonators. The blasting results have been positive with good fragmentation, less vibration, minimal damage to the surrounding walls and higher productivity. The lower mine is currently entering a phase with a higher proportion of secondary stopes available to be mined. These secondary mining blocks are destressed and have historically been easier to extract. All of these factors are expected to result in increasing quantities of higher gold grade ore being extracted from the lower mine.

The company is undertaking a comprehensive review of short-term and long-term production targets with a more conservative view, based on recent experience, of daily tonnage targets at depth thereby placing more emphasis than originally planned on the upper levels of the mine. While this does not have an impact on gold reserves, the resultant change in the originally planned ore mix would more evenly distribute gold production over LaRonde I's life. The new mine plan will be devised with an annual gold production target of 300,000 ounces per year. Any displacement of gold/copper mining blocks at depth will result in a corresponding increase in production from silver/zinc mining blocks.


The above statements say their gold grade will be higher in the future, but do not explain why AEM management expects higher grades for all 4 metals they mine. Their silver grades have been 2.32 oz/ton in 2001, 2.35 in 2002, and 2.34 for Ytd 9/30/03. Their projection for 2004 is 2.50 oz/ton. Their zinc grades have been dropping from 5.19% in 2001, to 4.14% in 2002, and 3.18% for Ytd 9/30/03. Their projection for 2004 is 3.40%. Their copper grades have been increasing from 0.21% in 2001, to 0.34% in 2002, and 0.53% for Ytd 9/30/03. Their projection for 2004 is 0.60%.

I'm not saying the company can't make these grades, but I'd like a little more information other than "This is what we're going to do next year!". This is especially important with a company that has performed so miserably these last few quarters.

Phil