Additional information has been posted in the comments on the URHG Facebook page. A J Cole asked a question about the significance of the new trommel, and the URHG President responded:
"Ken Barker A.J. good question, our new Plant will flow like this: ore dumped into feed hopper then into our new 34', 42K lb trommel a 4' screen with 2" holes will be added ....our old trommel had 8' of "wash" our new trommel will have about 30' of wash ( this is where the rocks tumble and are washed, to separate the gold) then onto our vibrating screens to be crushed down to 1/2", then through our wet magnetic separator ( where the magnetics are pulled out) then down through our duel jigs ( this is where most of the gold will settle) then down through our sluice box ( where the fine gold will be captured) then into the sand screws and the water goes back into our ponds to be re-circulated. We are hoping the new Plant will process 100-yards of ore per hour, 50-hours a week and hopefully at a recovery rate of 80%. The present circuit was built for testing purposes, the new plant should meet our operational goals."
This appears to explain why there was little or no gold production before now, and if you combine it with the recent press releases I think the URHG picture is now clearer. We know the mine "officially" opened in September 2014. The shareholders were apparently unhappy enough with the lack of progress after that to vote out President/CEO Kersey at the October 23 meeting. That brought Kilroy to the presidency.
On December 3, there was a press release where URHG stated they needed to get more water into their ponds, obtain permit modifications, and install a secondary recovery system (in addition to the existing circuit). They projected that once those things were in place, 2015 gold recovery levels would be between 1872 and 5990 ounces.
On February 24th, a PR stated the new President was Ken Barker. A month later, a new PR said gold recovery in 2014 had been "modest" but it looks like Barker spent March with "leading experts" and came out of it with an engineering plan and intent to upgrade the currently operating circuit (trammel and sluice). The PR said that over the "next six weeks" a better picture would emerge. (Middle of May?).
April 7, Facebook has photos of Barker in Idaho with the new trommel. The answer to A J Cole today (April 15) says that the existing recovery circuit (which I assume has been in place since the mine opened) is actually designed for test digs and not full production. Thus the current trommel is only 8 feet long while the trommel being prepared in Boise is 34 feet long. (I assume this is the type of information the expert consultants were able to provide in March which brought Barker to Idaho in April).
This appears to explain why there was little or no gold production, and if you combine it with the recent press releases I think the URHG picture is now clearer. We know the mine "officially" opened in September 2014. The shareholders were apparently unhappy enough with the lack of progress after that to vote out President/CEO Kersey at the October 23 meeting. That brought Kilroy to the presidency.
On December 3, there was a press release where URHG stated they needed to get more water into their ponds, obtain permit modifications, and install a secondary recovery system (in addition to the existing circuit). They projected that once those things were in place, 2015 gold recovery levels would be between 1872 and 5990 ounces.
On February 24th, a PR stated the new President was Ken Barker. A month later, a new PR said gold recovery in 2014 had been "modest" but it looks like Barker spent March with "leading experts" and came out of it with an engineering plan and intent to upgrade the currently operating circuit (trammel and sluice). The PR said that over the "next six weeks" a better picture would emerge. (Middle of May?).
April 7, Facebook has photos of Barker in Idaho with the new trommel. The answer to A J Cole today (April 15) says that the existing recovery circuit (which I assume has been in place since the mine opened) is actually designed for test digs and not full production. Thus the current trommel is only 8 feet long while the trommel being prepared in Boise is 34 feet long. (I assume this is the type of information the expert consultants were able to provide in March which brought Barker to Idaho in April).
If the new trommel and other modifications work as projected, then in another six weeks they are hoping for 100 yards of ore to be processed in a 50-hour week, and to have an 80% recovery rate from their existing single circuit. The variables then would be the number of weeks the circuit can run and the percentage of gold in the ore. If we suppose they can run the plant 40 weeks, then you'd have:
100 X 50 X .80 X 40 = 160000. Multiply that figure time the percentage of gold to find out the number of ounces.
So 160000 X 0.01 = 1600 ounces/year
160000 X 0.015 = 2400 ounces/year
160000 X 0.02 = 3200 ounces/year
160000 X 0.025 = 4000 ounces/year
That would be for the existing circuit. I assume the second circuit mentioned in the December 3rd PR would be added after the existing circuit actually worked as projected. If both circuits were successful, then the projections of "1872 and 5990 ounces" for 2015 would seem to be reasonable. If gold sells at $1000/oz then the projected 2015 production would be between approximately two and six million dollars. (Feel free to check my arithmetic, math is not my strong suit).
So if the updated circuit can produce at least 40 ounces a week by the middle of May, (assuming the drought doesn't dry it all up and there are no delays in obtaining or installing the equipment), it seems reasonable to presume the stock price will have to follow.
AI
