It’s hard to describe just how much (unprocessed) high grade ore exists in the gold and silver-rich region of Sierra region in Western Mexico. Prolific is a popular term, so is abundant, plentiful… let’s just agree there’s a lot. Less common in the region are fully optimized, operational mills like ours that have gravimetric/flotation circuits for processing ore at a highly cost-effective and efficient rate.
Like any business, mining is all about economics: how much it costs to make a discovery, how much to get the ore out of the ground, how much to process it and how much to transport it. Just one month after beginning full operations, we have already accepted $240,000 in toll processing deposits and have several months of ore stockpiled and awaiting processing. Such rapid progress for the toll processing part of our business is not a coincidence. We have located the mill close to a number of high-grade ore bodies and, following our engineering upgrade program, we have the capability of delivering very high recovery rates.
We also have our growth plan carefully mapped out. At present, the mill has a 300 tpd (tons per day) capacity. In the event that demand continues to grow, we have the ability to upgrade the mill to 600 tpd with minimal incremental capital and without any need for additional permitting.
An additional distinct advantage for Gainey lies in our operations team. As you probably know, the mill and processing center is being run by Gainey Operations Manager, George Cantua, who previously supervised Barrick Gold’s 24,000-tpd mill in the Dominican Republic. Optimizing the mill, ensuring ongoing cost-efficient running and managing increased capacity at such time as we grow to 600 tpd and beyond is something Mr. Cantua is more than equipped for.
Our business strategy is to simultaneously grow the toll processing part of the company, while exploring our exciting, highly prospective El Colomo property. We expect to use profits from the mill to fund much, if not all, of our exploration costs thus avoiding the need to debt or shareholder dilution by going to the market for additional financing. This business model has been used to great success by Dynacor Gold and with our mill already in good flow, and an industry-leading exploration team on board, our feeling is that Gainey is making excellent progress.
David Coburn, CEO of Gainey Capital