Fundamentals, page-315

Thanks Domain for reposting this video... I've only just watched it all the way through. It certainly contains some interesting insights and tit-bits.

I've included the link to the video again below, to make it easier for anyone wanting to view it.

The video was filmed on Friday 27 July and uploaded on 31 July. The two people in the video are Richard Crew (RC) and John Saunders (JS).

There's a fair bit of info on the plant itself, and RC also talking about what he thinks they can still do to make it more effective and reduce costs, but the key bits for me relate to processing throughput and what's happening with the tailings.

Info about plant process tonnage and grades
4:35
- Total processing is approx 32 t/hr (Hammer Mill - 15 t/hr, Circuit = 18t/hr), expecting that day's tonnage to be about 190 - 200 tonnes.
- They're looking at increasing feed gradually into the circuit, this means balancing and adjusting the variables as they increase, eg changing water, water flows and feeds, centre-fugal spinning speeds, making sure the discharging volumes can cope, etc.
- On Monday 30 July, they are planning to increase the feeds to approx 220 tonnes, and...
- They plan to start processing the high grade ore from Mestre and the Intermediate zones. The actual grades are intentionally withheld, but JC refers to them as "well above normal".

8:00
RC is talking about the plant when he says they “.... inherited a mess, but now making large strides forward and I’m looking forward to August.”
JS: “Especially now with the higher grades that we’ve seen from underground?”
RC: “Exactly”

Info about Tailings
10:00
- 40,000 tonnes of tailings (pity the thumb is obstructing the view, but we get a second look of them at the end of the video)

RC says he gets a lot of questions about why they're not processing tailings? And it's a simple answer!
1. They've been carrying out extensive samplings and know they've got high grades - reports varying from 9g/t, 80g/t, 87g/t, 30g/t.
2. However, there are a lot of uncertainties regarding the material, which will cost $x/tonne.
3. At this point the background noise makes it difficult to work out exactly what they’re saying, but RC is talking about they know they also have “other crap" (my words) in there, so want to investigate whether their gravity process will work, or will they need to put an addition on the back of the circuit.
4. These are all things they are looking at before making a decision about processing them.

RC: "But I’m very happy with the numbers that I have seen."


So from these insights, these are some of my deductions:
1. The plant, at that time, seems to operate for approximately 6 hrs/day, ie 32t/hr for a total of approx 190 tonnes = 6hrs operating time.
2. Monday 30 July they intended to start processing high grade ore from Mestre and the Intermediate Zones. Hence my assumption is prior to that, they were running the plant on lower grade ore while they tweaked the plant during re-commissioning to maximise it's efficiency. This also co-relates to OGX's advice in the quarterly report that they were relying "... on existing low-grade stockpile due to strike and flooding", and goes a long way to explaining why only 220 oz were produced in the second quarter.
3. We already know that on 30 and 31 July they had a dramatic increase in production results, with 100 - 110 oz from those two days, compared to the 220 oz for the whole previous quarter. This aligns with, and makes sense, when you cross reference it to the above information in the video.
4. If they did achieve the planned 200 - 220 tonnes on Monday, then assuming 210 tonnes achieved 55 oz, then this equates to approx. 8g/t. (BTW - If for some reason the tonnage was lower, this increases the g/t!)

(IMO, given the methodical approach displayed of proving up the plant with lower grade ore, it wouldn't surprise me that the ore going through from Monday would be the Intermediate zone ore, ie the lower grade ore, before they then moved on to processing the higher grade Mestre ore.)


I know looking back has been a difficult and frustrating period that's taken a long time to produce very little, but looking forward, I'm seeing a glimmer of something sparkling in the sun!

I'm just sharing my research and analysis, but the best thing you can do when investing, is to research and know your facts, and align and co-relate information... rather then relying of hear-say and assumptions from posters on HC.

Hope everyone has a good weekend .