Good report but I would make one correction that leads to an even more bullish scenario for the balance of 2014 and 2015.
You error was in the last sentence of the first paragraph of your Investment Thesis (it should say higher VALUE silver/lead..not higher grade) and then you further compounded that error later in the article by reversing yourself from silver/lead back to saying Management reported it's transition back to silver/copper. No big deal but there is deeper meaning in what they are trying to accomplish.
I'll explain and clarify. In the Q1 release dtd 4/30/14 USGIF states: They are transitioning workers from mining Lower-Grade silver/copper stopes to develop new WIDER, higher VALUE (not higher grade) silver/lead stopes. This transition is expected to lead to HIGHER Silver EQUIVALENT production and significantly lower cash and all-in-costs for the remainder of the year.
Explanation: Silver/copper stopes, though higher in silver content/oz, tend to be very narrow veins that require lots of workers with jackhammers, This is very labor intensive and yields lower tons/day production. Silver/lead stopes, on the other hand though lower in silver content/oz, are very wide and one worker with a type of mining front-end loader can remove many times the tonnage/day of 20 or more workers with jackhammers. Also the Galena silver/lead stopes have exceptionally high lead content/oz. (lead approx. $1.00/oz) The net result is a much high silver Equivalent VALUE.
This transition allows USGIF's workers to be used elsewhere in the mine more productively. Net effect is there will be significantly LOWER cash and all-in-costs per ounce of silver Equivalent for the remainder of the year. The wider veins using heavy equipment will increase quarterly production to over 500,000 silver Equivalent ounces in Q3 to over 600,000 in Q4. Net, net a very bullish story
Check out slide 7 which shows decrease in AISC and cash costs since new CEO took over.
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