Man, I'm so sick of unprofessional BS PRs. $4.5M profit? Do they even understand what the word "profit" means? It's the money you have left over from revenue after paying expenses, not how much money you'll get in revenue from concentrate you haven't yet smelted, or dore you haven't sent to the refiner, or in 30K tons of partially depleted ore that will take at least a year to reprocess after you get the leach permit and spend $2M to get the leach system built.
Let's run some numbers. They've processed 30K tons at 5 g/t at a recovery rate of ~20%. 30K tons at 5 g/t is 5000 oz of gold, only 1000 oz of which they recover. That's $1.5M that's either in concentrate or dore form, or sent to the refiner. Where's the other $3M of that $4.5M they say they will have as profits, plus ~$1M/month to pay expenses? Or maybe they are including the $6M of gold still left in the ore that needs to be reprocessed? (Thanks again, CQ.) But they need the leach system to get that out, and the permits for that aren't in hand yet, and neither is the $2M it will take to build it. And how long will it take to reprocess that 30K tons? It took over 2 years to process it the first time. And why would they process the partially depleted ore with only 80% of the gold left in it, when the mill will presumably be churning out higher grade fresh ore? The numbers just don't cut it.
The rest of the PR is even worse:
1. Validate the historic records as soon as possible? You mean by drilling? Complete BS. They haven't even started on that yet. After 4+ years the phrase "as soon as possible" no longer applies.
2. Attract the best people? I don't think I would include CQ (or DQ) in that description.
3. Use the Sinker to mine year round? I know they have run into bureaucratic obstacles to starting drilling in the Sinker, but that excuse gets old. What's the status?
4. Agree that the mill location is good, certainly better than Melba.
5. The path to profitability by mining the waste ore requires a mill with greater efficiency than 15-25%. Running the mill for two years at low efficiency at a loss only to produce 30K tons of ore that needs reprocessing is assinine. Thanks, CQ.
6. So when is the on site smelter going to be completed? Last November I think it was. So what is the status?
7. If SFMI has a great refiner, why send them only $60K in dore last quarter?
8. " While yields from processing were good"- What a load of crap. Since when is 15-25% recovery at an operating loss "good"? And I'll believe the leach system will be operational in 2013 when it happens, not when they say it will happen (see smelter situation above).
This really is the most poorly written PR yet, and the bar is prety low. It's something like you mght see on a message board- informal, sloppy, inaccurate, and lacking substance or new information.
