ECU's July 13, 2009 news release contained the following paragraph:
The amount of doré bars and the total weight for June was lower than that generated in the month of May due to a planned shutdown of the mill during June. We are planning to introduce higher grade gold material into the mill and the shutdown was initiated to make modifications to the mill to improve recoveries of this gold rich material.
Based on the above news release, the oxide ore processed in the mill during June graded approximately 2.67 g/tonne Au and 94.7 g/tonne Ag. Based on the news release for May, the mill recovery rates were 73.7% for the Au and 55.2% for the Ag. Since the short ECU news release said they plan to introduce higher grade material, I would think the future material will be at least 4 g/tonne Au in order to justify it being mentioned. Also, I imagine that ECU did not shut down the mill for at least 11 days in order to increase effeciency 1 or 2%, so I am hoping that the gold recovery increases to at least 80%. Obviously, ECU management is comfortable with their finacial status since this move shows they are planning for the long haul and are not living hand to mouth on a day to day basis.
If the gold grades increase to 4 g/tonne and the gold recovery increases to 80%, and the silver grades and recovery stay the same, we should get a nice increase in cash flow. Specifically, if mill output remains at the 451 tpd generated in June, and current gold and silver prices of $937.7 and $13.41 are used, then monthly cash flow from the oxide mill should be $1,610,392 and annual cash flow should be $19,342,700 from the oxide mill alone. I do not know if ECU is still processing zinc and lead concentrates from the sulphide ores, but since zinc and lead prices have increased about 40% from the bottom, this operation may again be profitable and may add to cash flow as well. Regards.
