Hi Baba!

I was commenting on this back when the merger was first announced. ECU was running out of cash and to keep the mill running they were extending development directly into the ore zones. This creates two problems:

1) It dilutes your ore because you must excavate a much larger volume of rock to allow access for heavy machinery and thus your vein material is mixed and blended with waste rock for a much lower overall grade

2) It limits the amount of mining you can do because the tunnels must be cleared of rock before the next phase can be blasted to extend development.

The effect of the above two factors is lower production, lower grade, and higher costs. This would account for a large part of the sluggish performance that ECU was reporting.

So now that AUM has had some time to clean up the operations and the company has the access to the funding to do it right, they are now driving a drift parallel to the vein. The drift is extended in waste rock, and opens up access for heavy equipment for the entire vein structure. They blast it out, and then muck and hual the waste quickly. Then crosscut tunnels are extended from the drift to access the ore material in stopes. The stopes are opened across narrow intervals to limit the waste, therefore the average grade of the material run through the mill is higher. And because they do the work to open an access drift first, they can open several stopes along the structure and mine from all of them on the same level. So you get more rock through the mill, more efficiently, with higher average grades, and the economics of the whole operation improve.

Meanwhile, while the company is mining in the stopes, another level of drifting can be opened up and the process continues.

cheers!

mike