Disclaimer: I'm not an expert on gold mining. The following is an interpretation derived from the latest quarterly report of the company.
The report gives diagrams of projected production and also gold grades at various levels in the mine. These are at different scales and some may not find it obvious how to relate the two.
It appears from this that for the sept. qtr (blue areas) a) there is some continuation of mining above the 1000mb level for which grades are not specified in the diagram. b) They are targeting the high grade deposit (104.7 g/t and surrounding area of around 13 to 19 g/t) in this quarter just above the 1180 sill drive (left side of diagram) c) They are targeting the area of around 28-30 g/t just below the 1180 sill drive (centre right of diagram).
From this we can infer that there should be a fairly hefty increase in the grades of gold mined in this area and consequent reduction in costs. (See below).
Note also that the projected areas following on for the Dec qtr (red areas) are nowhere near as high as the 104 g/t, but still pretty good compared to recent mining.
Let's hope that these projections turn out as indicated! -------- In regard to costs, these are generally inversely proportional to the grade of gold being mined. Following are graphs of annualised gold production and costs, also from the latest company report. It shows this relationship fairly clearly, that as production rates go up costs come down and vice versa. It also shows that the amount of capital cost/oz has been reducing over the last 9 months.
Average grade per ton in the June qtr was 6.5 g/t. When the really high grade is mined, this should go up considerably, and consequently cost/ton should drop considerably.
... so, my guess is that the next few months will be a boomer, likely followed by a considerable period of reasonably good production.
BCD Price at posting:
10.8¢ Sentiment: Buy Disclosure: Held
