Bigpic (clearview)

Saw your post on ihub about the concentrate. Since I only get one post a day over there, I figured I'd respond over here...

I don't think that the delay in sending the concentrate to the smelter was a deliberate decision. I think it is simply a result of not having finalized a contract with a smelter yet. Remember PQ mentioned a couple smelters elsewhere (in Nevada and Arizona, I think), and there is also one nearby. I think they are just working on getting the right smelter and the best deal. The right smelter will depend on the composition of the concentrate, since I think some smelters are better set up, for instance, to handle high silica. Though from the looks of what was coming off the shaker table, the concentrate seems pretty clean. I think SFMI has in house assay capability to do the assays before they send it to the smelter.

As far as whether the delay turned out well, I agree that it was either brilliant strategy or brilliant luck. Let's look at the numbers...

Let's assume there is 1000 lbs of concentrate, and the concentrate is gold and silver, with the silver being in the form of acanthite, or silver sulfide, the most common silver ore (and what I saw a lot of in the ore at the sites). If the historical ratio of Ag:Au of ~15:1 holds up, that would mean 55 lbs of gold and 823 lbs of silver (with the rest being sulfur).

At 1210 gold and 17.80 silver, that's 1210 x 55 x 16 + 17.8 x 823 x 16 = $1.3M. At 1370 gold and 24.5 silver, that's 1370 x 55 x 16 + 24.5 x 823 x 16 = $1.53M, or $230k more. Not a bad return, but not quite the $1M you mentioned as a possibility. Of course, if they have accumulated more than 1000 lbs (it has been another month since the meeting...), those number go up. And of course, the numbers will be quite sensitive to the Ag:Au ratio.