When I talked to our new IR person last month he said that ECU had several offers to buy our gold pyrite concentrate at 50% to 60% of metal value and that these bids were unacceptable to ECU. Baised on those numbers, my guess is that agreed rate is close to 70% of value. Since we already have concentrate with 8500 ounces of gold and probably 50,000 ounces of silver, at current prices and a 70% return, its value is $7,843,850. This will add revenue of $1.3 million per month if spread over 6 months.
In the 1st quarter of 2010, ECU milled sulphides at the rate of 154 tpd. This means we can double processing since the sulfide mill has a capacity of 320 tpd. In Q1, our pyrite concentrate production contained 718 ounces of gold and 4746 ounces of silver. At a 70% sales rate this is $223,082 per month of additional income. If the sulfide mill is run at 308 tpd, pyrite sales would be $446,164 per month. All this is additional income and has the long term potential to increase monthly revenue fron $2 million per month to $2.5 million per month. Anytime you can increase revenue 25% without any increase in costs, the effect is huge.
Now that we have a decent rate for sale of the pyrite con, the scoping study for the proposed 1500 tpd sulphide mill can proceed.
Based on Q1 metal production, and the above assumptions, if we add a new 1500 tpd sulphide mill to the mix, revenues should rise to about $7 million per month.
