Opportunity to jump the Q. Already getting some deliverites for the 3.5 Reconditioned equipment which then is given back. Gravity working with you at the 2 open mines. Gravity not assisting as much at the closed mine. Closed mine requires more drilling and less production per unit. 30 to 35 thousand per year at closed. 50 to 55 at the other open mines. Older estimates are a bust.
6.3 cost of goods charge we do not expect those type of charges going forward. Looking at a number of alternatives for possible financing...talking to a number of them.....20 to 40 million in a range of possible financing. Turnaround program will give 20 million cash flow positive they are confident. As well as nondirect and direct cost ...these too will be good. Cash cost of 800 dollars is realistic. Backup plan is additional financing. They do not think additional financing is necessary. Brazillian based debt will generally roll over. They think it might be extended....an option. Also north america possible financing. Possible interest rates are 7 to 8 percent.
Being very candid. ..they are. They have had several approaches at Gurupi assets. Will consider them. Interest level has caught eyes. The answer is yes they are thinking of selling. Dilligently review them.
Run rate of 800 by end of year and lower after. Manpower can be reduced by 20 percent and NO reduction in production.
Square of the width of the excavation ......cost goes down in proportion. Materials reduced by 20 percent.....and No reduction in production.
General and administration decreases.
Significant component is decrease in staffing with no decrease in production.
1.6 million at closed mine ceo has not had opportunity to put an ax at. They were mining by braile at closed mine. Very uneconomical. Have recently done engineering work...20 million of research needed to get the closed mine ...to know what is happening.
Sustaining capital....development. An operating cost ceo thinks it is. Equipment replacement too. Sum of those two 20 to 25 million. As good of estimate as they can give now. Once at steady state, there will a defined amount of developemtn to sustain reserves 12 to 24 month in front of you. They need to look at that once operations steady. Capex at Q2 ..campaign of examiming every capital expenditure and making people justify if...an economic justification closely looked at. When interogate expenditures in detail u will be surprised at how many of them go away. the mine development is 60 percent of staying in business...general planning purposes. Look at 2nd quarter reduction in capex ..improvement replacement..savings were in improvement replacement and not in mine development. Have gone over with fine tooth comb.
LABOR.....will reduce the cost......LABOR is HIGhLY emphasized 350 people more to cut. U do what u have to do to make profitable. Also cutting noses in southern africa.