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Lamaque – tpd analysis (and thoughts)
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1042 Posts
April 8, 2008 - 3:39 am

It looks like tpd at Lamaque is finally starting to climb, after a very slow start. Tpd in Q3’07 and Q4’07 were pretty much flat. I believe there were many challenges in Q4, but here are a couple that immediately come to mind:

*CMM went through a material change in Oct and Nov (a hard and abrupt cutover from o/p to u/g). This would have created a lot of non-operational issues for management to deal with, and thus takes away from operational focus.

*severe u/g worker shortages – Century initiated an aggressive recruitment and training program to address this ramp up issue. I did not expect them to realize the benefits of these efforts until about 4 – 5 months afterwards, as it takes months for folks to be recruited, trained up and go through their initial learning curve. I think the numbers are showing that we are now seeing the fruits of the labour, effective in Mar’08.

I think we are well on our way now (pending any major setbacks). Here is what the tpd has looked like for Lamaque (since Q3’07), and what I would like to see the next 3 months (as a minimum). I would like to see them increase the tpd by 75 each month. Realistically, with the PP soon to be closed off, I would like to see them do much better than 75.

(90 days assumed for each quarter, and 30 days for each month, with the exception of Feb)

* Q3’07 act – 200 tpd (18,000 total tonnes for quarter – info from Q3 cc)

* Oct act – 172 tpd (5,137 tonnes – Feb 21’08 NR)

* Nov act – 207 tpd (6,200 tonnes – Jan 14 cc)

* Dec act – 233 tpd (7,000 tonnes – Jan 14 cc)

* Jan act – 260 tpd (7,783 tonnes – Feb 21 NR)

* Feb est - ??? tpd (no results available - let’s assume only 270 tpd)

* Mar mtd – 325 tpd (Mar 25th NR, results only at 23rd – chance to be 330–335)

* Apr target – 400 tpd (s/b achieved if no major issues – I hope to see 410-425)

Going forward, with the PP soon to be closed off, I am fully expecting them to increase tpd by at least 75 on average in each future month – as already mentioned. I will be extremely disappointed if I don’t see it. I suppose timing in reaching ore areas might throw off the month to month consistency, that’s probably why quarterly averages are more reliable (for example, 1 month we could see 40 and the next month 110, but it would average out to 75) – I think that would be acceptable also. Quite frankly, they would need to increase tpd by more than 75 per month once they reach the 2nd half of 2008, if 2008 2nd half targets are to be met.

This is what May and Jun would look like if they meet the Apr target and are able to increase tpd by the 75 per subsequent Q2 months:

* May – 475 tpd

* Jun – 550 tpd

With regards to Q1’08 overall, the average tpd would be around 285 (if we use 260, 270 and 325). The company’s target is 300 tpd. If it turns out to be slightly short (of the target) then they could probably make it up with grade. As mentioned in a previous post, the company has not actually started mining the 1.1M reserve ounces (4.78 g/t) as yet (they are developing towards it, but need the cash to get there quicker). As such, they are mining additional material at this time. That is why they set their g/t target to only 3.5 in 2008. As they mentioned in their Mar. 25th NR, they expect actual g/t in Q1’07 to come in over 4.0. The higher grade will hopefully offset the lower tpd, which hopefully will lead to production ounces being met in Q1 (we’ll have to wait and see).

With regards to Q2’08 overall, the average tpd would be around 475 (if they are able to hit 400, 475 and 550). This would beat their Q2’08 target of 450 tpd.


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