April 4, 2011
Recap of low-profile room and pillar mining in the Lamaque no. 2 flats:
As mentioned, the low-profile room and pillar mining we are currently performing in the Lamaque no. 2 area should be somewhat similar to the last animation video, especially with regards to the mechanization aspect. It is huge progress to be able to move away from jacklegs and slushers (though, using them in San Juan is still likely an improvement from whatever is currently being used at San Juan). We are mining in Val d`Or at a very good point in time. Val d`Or is populated with plenty of narrow vein ore bodies. This low-profile equipment sounds ``revolutionary`` and we are now the North American mining leader (it may open up doors for us once we are ready to grow the business). The abilities of these low-profile jumbo drills, scoops and trucks to travel deep into the mineralized areas completely changes the level of economic viability of mining these types of ore bodies:
1) Major efficiency gains with switching from jacklegs to jumbos.
2) Double the blasting capabilities in some cases (I guess partly due to the efficiency of the jumbos coupled with the abilities to quickly transport larger amounts of material away with the low-profile scoops and trucks being able to move closer to the mineralized zone).
3) Major efficiency gains from eliminating the slusher step.
4) Major increase in transported load from the scoops and trucks reaching closer to the the minerialzed zone coupled with the low-profile equipment designed in a manner which allows for greater transported load per carry.
5) Speed of the new low-profile equipment in maneuvering through tight underground quarters.
We are seeing very solid results so far. We are already up to 1,000 tpd primarily via the low-profile equipment in the Lamaque 2 area. In H1 2008, we had only made it up to about 200 tpd during the test pilot underground start up phase (with mainly a jackleg mining approach), prior to being left frozen from the global financial crisis.
LHOS mining of Bedard Dyke and North Wall:
Unfortunately, I am not able to find a good animation video (or otherwise) on long-hole open stope mining. I have provided a link of the World Gold Council diagram of long-hole stoping (located in the middle of the linked page). I had posted it on the blog a couple of times previously. This seems to be the only good long-hole stoping diagram on the internet, or so it seems. One can probably get a good appreciation of the development work going on at the Bedard Dyke by glancing at this diagram and relating it back to the conference call.
Per Adrian McNutt in the last conferance call:
1) They have already driven across the dyke.
2) They started the top crosscut (that`s likely the access area that says ``drill access`` on the diagram).
3) They are ramping down to the next level to set up the bottom fill for the stope (as it relates to the diagram, this likely means (once they ramp down to the next level) they will establish the ``undercut``, ``loading crosscut`` and the ``transport drift``.
4) They will put in the ventilation infrastructure also.
5) They will then initiate drilling and blasting (eventually).
Very interesting and informative presentation. Questions:-
1) You seem to imply that getting up to 1000tpd (vs the 200tpd in the old days using jacklegs etc) is impressive and the low profile
equipment is up to mark. Right?
2) If the answer is yes, then, it is possible when the full batch of low profile equipment is put to use and having all the mining personnel well trained and experience gained we can expect further increase in productivity and production up to 2000tpd may jolly well be reached way ahead of schedule?
3) You mentioned ..the low profile equipment may open doors for us once we are ready to grow the business..do you mean that one of the possible benefits is--the command of this mining method may help to operate otherwise uneconomical mines and hence help in the acquisition/expansion program? A case where we have superior technology and uncommon mining experience? (as this is the first time such equipment are being used in North America)
1) Yes, it is my view that low-profile room and pillar mining in the Lamaque 2 area has been very impressive, especially over the past 2.5 months. The Lamaque grade is not too concerning to me. They say the reserve grade is coming in at close to what was booked in reserves. They should be able to increase the non-reserve grade over time. Also, the Bedard Dyke and North Wall grades should help to increase the overall blended grade.
Actually, I agree with Mr. Hulley with regards to the high level talent at Century. I am seeing signs that the geologists, engineers, mine planners and the other people that built the Lamaque start up plan are really on the ball. Here are 3 examples that impress me the most:
*Huge success with Bedard Dyke drilling: It tells me that Century`s geologists have a great understanding of the history and geology of the property. The mineralization and structure of the Bedard Dyke turned out to be almost exactly as they had mapped out prior to recent drilling. What was especially impressive is that they were able to map out the Bedard Dyke with only 2 historical drill holes, 1 modern test drill hole and a bit of mining in the area during the open pit days. It tells me that these guys did their homework in understanding historical dyke structures on the property but it also tells me that they are very talented.
*These folks were fully on the ball in understanding the extra tonnage potential of the Lamaque no. 2 stopes. Stope strength/extension wise, it is turning out to be almost exactly what they expected. This was from the bankable Lamaque study from January 2009:
``To date, Century’s own experience of mining 15 flat vein stopes on 4 levels have demonstrated that almost all stopes have been more continuous and produced many more tonnes than were reported to be contained in the NI-43-101 compliant reserve or the geologists estimates prior to
mining. In many cases economic ores have been stoped without any NI-43-101 compliant reserves
even being recorded. Mining flat veins in the Sigma mine has resulted in producing nearly double
the ounces than were predicted by the polygonal method. If this experience is repeated in the
future, it suggests that insitu reserves in flat veins might have been underestimated. As a result the resources identified but not mined by Placer-Dome (e.g. the 76-77 vein) could contain resources
comparable to that mined in the Lamaque main ore zone. This is regarded as an upside benefit to
the project and if this trend continues to be confirmed by the budgeted drilling in advance of
mining, it will allow Century to optimise the mining layouts and schedule additional tonnage.``
* The change of strategy over to low-profile room and pillar mining in the Lamaque 2 flats - well documented on the blog already.
These are all major (and vital) successes with the Lamaque start up. However, none of these successes have been reflected in the share price as yet.
I will try to answer your other 2 questions a bit later.
2) I`m not sure where they will cap the Lamaque 2 tpd. On a short-term basis they might try to push the tpd a tiny bit higher until BD and NW is online. However, my guess is that they will limit the Lamaque 2 feed at some point. I say this because there is only 1 Lamaque 2 decline and 1 haulage drift from Lamaque 2 to the Sigma pit. I`m sure they wouldn`t want the traffic to get to heavy.
BD ore should be helping out soon. It`s not clear, but it would make sense for them to try a balanced approach, once all 3 zones are online. On a longer term basis, maybe they could try 700 tpd Lamaque, 700 tpd BD and 700 tpd NW. This will get us up to 2,100 tpd. Once they reach that point, hopefully they will begin to strategize about building and launching a new mine plan that can push us to 3,000 tpd.
3) That`s correct. Hopefully our experience with the new equipment will provide us with turn around opportunities (at discounted prices) - uneconomical properties (if we view them as fully salvageable) but mainly underperforming properties that can be turned into solid (average or above average) performing operations with mechanization from the new technology and applying our experience at optimizing the technology in this neck of the woods.
from your detail descriptions, one can see that very satisfactory
progress are being made in the mining fronts with the low profile equipment making a very decisive contribution. Though you stated in your recent posting that we could potentially get C$10million revenue per month possibly even as early as Dec, do you anticipate extra strong figures in the coming 3rd quarter reporting in tpd, ounces and perhaps cash flow?
c-mon guys, you sound a bit like company day-dreamers, he did say "long stope" though...that is just sick! A friend of mine who once worked for Peggy and is a jack-legger says this method will work underground.We will wait and see then.Lets brainstorm over a new boss,way more interesting.Prod05, do you have any co-ordinates for the northbelt property,i am planning a hike for this weekend.The company is disclosing this info.thanks moich
do you have any co-ordinate for the nortbelt property,thinking on going for a hike this weekend,check things out.
Lamaque tpd for July was 820 and will likely stick at around 1,000 for August. September should be at least 1,000 again, but hopefully it increases to 1,100 if they continue to have success in expanding Lamaque 2 or if they finally get going with some bulk samples from the Bedard Dyke. The launch of Bedard Dyke mining is planned for early October (a bit more than a month from now).
With regards to quarterly financial reporting, the bottom line on the Income Statement will continue to reflect only San Juan and Corporate for both Q3 and Q4. Lamaque will continue to be capitalized 100% within the balance sheet until commercial production declaration (most likely 90 consecutive days of 1,200 processed tpd or better) in H1 2011. The cash flow statement will likely be treated in the same manner.
Northbelt has a 15 km strike length immediately above the 3-5 million ounce hitorical production of the old Giant Mine, along the volcanic belt. The Northbelt property is thought to include the northern extensions of the Giant Mine ore bodies, which I believe were still open towards the direction of Northbelt (north direction from Yellowknife). Northbelt also includes the Crestaurum gold deposit.
Something I read lately
1) Aubie Baltin CFP,CTA,CFA, Phd (retired) of Uncommon Common Sense says " Just as the junior PM traders are ready to capitulate as they lose all enthusiasm for these speculative plays and dump their shares, the best and strongest seasonal buying opportunities are emerging. Mid-August typically marks the bottom of the CDNX's weakest season. But by the end of this month into September, the bottom will be in as it rallies back up through resistance forming the beginings of what is usually a strong autumn rally and what this time could/should be an explosive Rally into new all time highs. BACK UP THE TRUCK!
2) Bob Hoye, chief financial strategist at Institutional Advisor says" I'm long gold stocks and have very little exposure anywhere else"
3) Canadian gold expert and commentor Jeff Nielson says "...the smaller producers-the "junior miners"-have provided investors with many spectacular success-stories, with the best clearly still to come"
4) Former analyst Jasan Hamlin and founder of GoldBullStock.com says "..we should be able to generate some serious profits in the next year by taking advantage of the current sale of mining stocks"
5) Mike Pienciak, Motley Fool commentator says " ..for the more aggressively minded gold bulls, exposure to the miners would appear to be a no-brainer"
In short, these in-the-know insiders are convinced we're set for a surge in gold stocks
In addition the Giant Mine mineralization still open immediately towards our Nortbelt property, we also have 2 other already established deposits on the property:
1) As mentioned, we have the Crestaurum gold deposit. This deposit already has about 45,000 ounces identified @ 10 g/t grade. However, the potential appears to be very high. Here is a short university study/report that was produced in 2004 about the Crestaurum geology:
``Geology of the Crestaurum gold deposit, Yellowknife Greenstone Belt, Northwest Territories, Canada
by Ootes, Jacob Johan Luke, M.Sc., UNIVERSITY OF NEW BRUNSWICK , 2004, 315 pages; MR06920
The shear zone-hosted Crestaurum gold deposit occurs in the north-central part of the late Archean Yellowknife Greenstone Belt, 15 kilometres north of the Yellowknife, NWT. Kam Group mafic volcanic flows and associated mafic dykes, the Crestaurum tuff, and the Ryan Lake pluton underlie the Crestaurum area.
Four distinct mineralization events are recognized within the Crestaurum Mine area and include syn-volcanic stockwork sulphides, syn-plutonic molybdenite mineralization, the syn-D2 Crestaurum shear zone-hosted gold deposit, and late sphalerite and galena mineralization. The Crestaurum shear zone-hosted mineralization is the most economically significant in the area. Gold mineralization is associated with early arsenopyrite and late stibnite and antimonide minerals. The styles and physiochemical conditions of mineralization are consistent with mesozonal mineralization followed by epizonal mineralization, which is similar to the Con-Giant systems. This indicates a belt-scale gold deposit continuum that formed during late Archean, indicating there may be yet undiscovered, or significantly untested, gold deposits in the northern Yellowknife Greenstone Belt.``
2) In the mid to late 90s an exploration company called Nebex drill-delineated a 130,000 ounce gold deposit @ 4 g/t on our Northbelt property. The zone is open both along strike and at depth. It`s been a while since I viewed the details but I recall it being somewhat shallow, but again, fully open.
Digested and summing up all the main info in the past 3 months, I have noted the followings:
1) with additional info made available, it gives a strong impression (perhaps indications) that the company is capable of growing its potential ounces in the top part of the ground in the Lamaque flagship properties possible to the tune of 10million oz in all catagories and deeper down the ground...
2) historically, the Sigma mine was developed to 6100 ft while the Lamaque mine to 3500 ft below which was virtually unexplored. Company believes that the gold mineralization continues to depth beneath both areas and historically the grades has improved as the mine was developed deeper. This seems to imply that much potentials may exist in the deeper bowels.It is known that Anico's LaRonde mine has already gone down to 9100 ft (3000M) so what is there to prevent us from going to the same levels and deeper? (assume there is gold to be scopped of course!) Let's not underestimate the low profile equipment which has just proven their worth lately and has literally turned into a highly valuable mining asset of the company, a first in North America and possibly putting CMM in mining techniques leadership status in this part of the world too. ... cont
3) without much fanfare, the company has gathered a group of highly talented geologists, engineers, mine planners among others, not forgeting the Vulcan 3D resource modelling team and
4) As a result of these quite yet talented individuals together with the dedicated miners and the BOD, the mine start up etc are progressing very well over the months with some unexpected ahead-of-schedule achievements as well thanks partly to the low profile equipment which has proven to be a performance booster of impressive proportions.
5) the quarterly results are seen improving, we are soon to achieve commercial production status and cash flow is improving too. Further, it is anticipated that full capacity production per current mine plan with Lamaque at 2000tpd, 4.77g/t and 96% gold recovery will be fulfilled in due course after which a leap to 3000 tpd mine plan may then be envisioned.
To cut matter brief, one cannot deny that this is a new CMM and it is capable of aggressively growing its reserves/resourses, expand its production and improve its profitability (San Juan and other NWT properties are intentionally being left out). With the gold prices staying strong and expected to strengthen in the future, I believe that the SP will sure reflect all these positives soon. We may perhaps be waiting for a SP volcano to erupt too.
One more important note I forgot to mention about Crestaurum: It has a shaft and exploration drifts already in place. Of course, one would assume that there would need to be dewatering and refurbishment required if Century was to one day launch an underground exploration program. Nonetheless, having useful infrastructure already in place to support an underground program is huge. It`s even more attractive knowing that the past underground exploration drill program (albeit, limited with only 45,000 ounces) provided an average grade of 10 g/t (or essentially 1/3 ounce per tonne).
We were limited to drilling from the surface with the first phase Bedard Dyke drill program. We didn`t have a drill station underground and exploration drifts to move around - at the time. As a result, we were not able to reach a number of good underground targets during the first phase Bedard Dyke drill program. This is why an already established shaft and exploration drifts would be extremely beneficial at Crestaurum, if an exploration program was launched one day (allows us to aggressively attack the property with both surface drilling and underground drilling). Also, the shafts and drifts could allow for underground bulk sampling. This could be a big advantage in one day preparing a feasibility study (of course, if exploration efforts were to eventually reach that level of success). The underground bulk samples should also allow for metallurgy testing (good info to fine tune the exploration program and to include in the feasibility study).
Anyway, this is just info for down the road. Right now, our focus is fully on delivering Lamaque. Options will really open up for us once we deliver Lamaque to a more comfortable state.
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