My thought is that they planed to produce more than 20K ounces per year. Things dont always work out as planed especially in low grade mining. I dont think anybody is claiming they have been a success with the pit. If they were successful, their stock would not be trading in these ranges. With the grades they currently are drilling underground though they can be successful. 7-8 times the grade processing 1/2 the volume of ore will give them about 4 times the gold eq. My point is that at a later date they may be able to mine some of the pit along with the underground with both areas paying the overhead costs. Spreading the cost over more ounces reduces the AISC. The actual mining cost was not all that high. (take the costs attributable to mining and divide it by ounces produced on the financials)
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