2012 Production Guidance
The Company is forecasting strong production growth in 2012, between 200,000 and 220,000 ounces of gold at a cash operating cost of $365 to $390 per ounce of gold sold, exclusive of a 5% royalty. Including the 5% royalty and assuming a $1,600 gold price, this equates to a total cash cost range of $445 to $470 per ounce of gold sold. The Company expects gold produced from the gravity mill, which will process high-grade ore from Escondida, will add a minimum of 67,000 ounces of production in 2012 at a grade of 13.4 g/t Au. Based on bulk sample testing conducted in 2007, the Company believes that there is the potential for higher production from the gravity mill as a result of realizing positive grade reconciliation to the reserve grade.
The following key parameters form the basis for the 2012 production forecast and operating cost estimate:
- Combined gold recovery of 77% (heap leach ore, 72% recovery; mill ore, 90% recovery)
- Throughput: 17,500 tpd (includes 500 tpd from the gravity mill)
- Average grade: 1.33 g/t Au blended grade (heap leach ore, 1.0 g/t Au; mill ore, 13.4 g/t Au)
- Waste-to-ore ratio of 0.64:1
- Mexican peso:United States dollar foreign exchange of 13:1
The Company expects these parameters to fluctuate throughout 2012 and as a result, these parameters should be treated as full-year averages and will not necessarily be reflective of quarterly operating results.
