Rochester is one of the great silver mines of the world, having produced more than 125 million ounces since production began in 1986, along with 1.2 million ounces of gold. With expanded reserve levels, we are preparing for additional production to begin in the second half of 2011.
Construction of a new leach pad is expected to be completed mid-year with new silver and gold production ounces anticipated beginning in the fourth quarter of 2011. This new production is expected to increase total average annual production to more than 2.4 million ounces of silver and 35,000 ounces of gold annually for at least the next eight years.
2Q -- Expansion on Schedule
• Ore is now being crushed and stacked on the new leach pad, which will lead to increased silver and gold production in the fourth quarter.
• Metal sales were $14.4 million, operating cash flow was ($2.3) million and capital expenditures totaled $4.2 million. Operating cash flow was negative because of costs related to pre-stripping activities for the expansion. These costs are expensed during the period in which they are incurred rather than capitalized.
• Over 200 million tons of additional mineral resources are located in the existing pit walls and represent a further significant growth opportunity.
Exploration in 2Q
Drilling shifted from ore control to exploration in the second quarter. A total of 6,809 meters (22,346 feet) of reverse circulation drilling was completed in the second quarter at the LM target, northwest of the mine and at the Nevada Packard area.
• Year-end proven and probable reserves totaled 27.6 million silver ounces and 247,400 gold ounces, measured and indicated resources were 94.4 million silver ounces and 708,800 gold ounces, and inferred resources were 14.3 million silver ounces and 68,700 gold ounces.
• Year-end measured and indicated silver resources increased 72% while measured and indicated gold resources increased 73%, which the Company believes bodes well for further expansion opportunities at this historic silver and gold mine that commenced operations in 1986 and has produced over 127 million silver ounces and 1.5 million gold ounces.
The expansion is expected to add approximately 200 jobs, providing a boost to the Nevada economy. In addition, the mine recently received awards from the Nevada Mining Association and the Mine Safety and Health Administration for safe operations. The mine currently has exceeded 1,224 days without a lost-time accident.
|Location||Rochester, Nevada, USA|
|Metals Produced||Silver and Gold|
Historical Production Data
|Tons under Leach||8,976,000||9,327,000||10,399,000||5,061,000||
|Ag Grade (oz/t)||.74||.91||.74||.65|
|Au Grade (oz/t)||.009||.010||.010||.006|
Historical Financial Data
|Cash Costs/Oz of Ag||$4.82||$2.80||$1.52||($0.03)||$2.58||$3.78|