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Genco is engaged in silver and gold mining, and related activities, which include exploration, extraction, processing and reclamation. The company is focused on developing its core asset, the producing La Guitarra silver-gold property located in the Temascaltepec Mining District of Mexico. La Guitarra Mine presently consists of two underground operation centres and a flotation mill with a proven capacity of 320 tonnes per day. Genco recently completed a Feasibility Study, which evaluated a ten-fold expansion of existing mining operations at La Guitarra Mine to 3,000 tonnes per day. [source: company web site] The Genco Resources Ltd. web site is at www.gencoresources.com.
As of the financial filings for the quarter ending 2010-Q2, the company had C$4.05M in cash (and short term equivalents). The cash flow in the quarter was (C$-1.48M). During Q1 La Guitarra operations were the process of restarting after the 13+ month illegal stoppage. Production restart extended in to Q2 with Q3/Q4 being the first quarters expected to achieve normal production flows.
On July 21, 2010, Genco reported receipt of payment $1.3 Million from the sale of its Chief shares... more.
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Genco
Announces Completion Of Feasibility Study, December 16, 2009.
Projected pre-production capital costs for the construction of a new mill and mine development are US$148.7 million, which includes taxes, contingencies and working capital totaling US$40.4 million. Estimated pre-tax cash flows over the initial 9-year project life are US$125.2 million after capital recovery, resulting in a pre-tax 20% internal rate of return. The provisional time for project pay back is 3.6 years at the study's metal price averages. The estimated net present value of the project is US$74.8 million using a 5% discount rate. The study used average metal prices of US$14 per ounce for silver and US$800 per ounce for gold for all cash flow and pay back estimates.
This report is based on NI 43-101 resource and reserve disclosures and fully diluted share counts available on 2010-08-19.
The GoldMinerPulse metrics, presented below in table format, are based on all projects and all in situ metals and are updated daily with closing market prices.
| General Metric | Value on 2010-09-02 |
|---|---|
| In Situ Metal Value per Share (MVpSh) | US$32.12 |
| Average Ore Value per Tonne | US$171.93 |
| Metal Value Leverage (MVL) | 99.51 |
| Market Capitalization as a Percentage of Metal Value | 1.0% |
| Recent Closing Stock Price | C$0.34 [note 1] |
| Fully Diluted Share Count | 127.67 M [note 2] |
| Percentage In Situ Proven + Probable Reserve | 24% |
| Percentage In Situ Measured + Indicated Resource | 4% |
| Percentage In Situ Inferred Resource | 72% |
| Metric | Value on 2010-09-02 |
|---|---|
| Gold Reserves + Resources | 1.04 M oz |
| Average Gold Ore Grade | 1.3 g/t |
| Market Capitalization per oz of Gold In Situ | US$39.81 ( C$41.94 ) |
| Gold Equivalent Ounces Estimate | 3.28 M oz |
| Market Capitalization per oz of Gold Equivalent | US$12.57 ( C$13.25 ) |
| Metric | Value on 2010-09-02 |
|---|---|
| Silver Reserves + Resources | 142.46 M oz |
| Average Silver Ore Grade | 185.8 g/t |
| Market Capitalization per oz of Silver In Situ | US$0.29 ( C$0.30 ) |
| Silver Equivalent Ounces Estimate | 208.24 M oz |
| Market Capitalization per oz of Silver Equivalent | US$0.20 ( C$0.21 ) |
Note 1: Conversion rate used: 1 Cnd$ = 0.949244 US$
Note 2: Fully diluted share count is from Genco Resources Share Structure web page (viewed August 2010) plus the option and warrant counts current as of August 12, 2010 (see June 30, 2010 MD&A).
All metal counts in this section are based on the combined Proven + Probable reserves plus the Measured + Indicated and Inferred resources.
| Metric / Metal | Gold | Silver | ||
|---|---|---|---|---|
| Total Counts (reserves + resources) | 1.04 M oz | 142.46 M oz | ||
| Metal Prices in US$ (from 2010-09-02) | $1,251.30 per oz | $19.69 per oz | ||
| Metal Value per Share (MVpSh) Shown in US$. Based on fully diluted share count | $10.14 | $21.97 | ||
| Percentage of Total Metal Value | 31.59% | 68.41% | ||
| Metal Value Percentage Proven + Probable | 26% | 23% | ||
| Metal Value Percentage Measured + Indicated | 5% | 4% | ||
| Metal Value Percentage Inferred | 69% | 73% | ||
The above metal value totals derive from the following projects.
| Project | Location | Metal Value per share (% total) | Gold | Silver | PP% | MI% | I% |
|---|---|---|---|---|---|---|---|
| La Guitarra | Temascaltepec, Mexico | $32.12 ( 100.0% ) | 1.04 M oz | 142.46 M oz | 24% | 4% | 72% |
PP%: percentage of metal value from Proven + Probable reserves
MI%: percentage of metal value from Measured + Indicated resources
I%: percentage of metal value from Inferred resources
Note: percentages may no add to 100% due to rounding errors
La Guitarra mining was halted by an illegal walkout and subsequent blockade by former employees of contractor, SIMSA, in late October 2008. The conflict was resolved in November 2009. As of a June 18, 2010 news release, the mine is fully permitted and mining and milling increasing quantities of ore. Higher grade ores were observed on a day by day basis as the company worked to complete its 7th shipment of concentrates.
At the end of 2009 the company completed a positive Feasibility Study for La Guitarra, with a 411% increase in reserves, supporting a project which would yield up to a tenfold increase in tonnage with a yearly output of silver which would make La Guitarra one of the largest silver mines. [Source: company 2010-Q1 MD&A and June NR ]
NSR royalty up to 3.5%. [Source: See p. 29 of 145 in the NI 43-101 report dated December 2009.]
Production Costs: US$8.46 per ounce of silver equivalent for 2008-Q3. Production was interrupted in October 2008 by the illegal walkout and blockade and Q3/08 is the last full quarter of normal operations.
Latest NI43-101 Report: La Guitarra Mine Technical Report, Temascaltepec, Mexico
2010-01-29 (142 pages).
Project Location: Temascaltepec, Mexico in the Sierra Madre Occidental mining region. View project on a Google Map.
Proven + Probable
| Metal | MVpSh | Contained Metal Quantity | Ore Grade | Ore Quantity |
|---|---|---|---|---|
| Gold | $1.01 | 102.56 K oz | 1.460 g/t | 2.19 M t |
| Silver | $2.26 | 14.68 M oz | 209.000 g/t | 2.19 M t |
Estimate notes: Underground reserves from
Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces, January 29, 2010.
Reserves calacuted using a 135 equivalent silver grams per tonne cut-off, a 20% dilution factor at zero grades.
Proven + Probable
| Metal | MVpSh | Contained Metal Quantity | Ore Grade | Ore Quantity |
|---|---|---|---|---|
| Gold | $1.61 | 164.55 K oz | 0.750 g/t | 6.82 M t |
| Silver | $2.74 | 17.77 M oz | 81.000 g/t | 6.82 M t |
Estimate notes: Open pit reserves from Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces, January 29, 2010.
Measured + Indicated
| Metal | MVpSh | Contained Metal Quantity | Ore Grade | Ore Quantity |
|---|---|---|---|---|
| Gold | $0.54 | 54.76 K oz | 0.790 g/t | 2.16 M t |
| Silver | $0.84 | 5.48 M oz | 79.000 g/t | 2.16 M t |
Estimate notes: Open pit resource from
Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces, January 29, 2010.
Cut-off 45 g/t Ag Eq. Measured + Indicated, exclusive of Proven + Probable estimated by reducing the total M + I open pit resources by the
Proven + Probable ore tonne.
Inferred
| Metal | MVpSh | Contained Metal Quantity | Ore Grade | Ore Quantity |
|---|---|---|---|---|
| Gold | $0.85 | 86.26 K oz | 1.000 g/t | 2.68 M t |
| Silver | $1.00 | 6.47 M oz | 75.000 g/t | 2.68 M t |
Estimate notes: Open pit resource from
Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces, January 29, 2010.
Cut-off 45 g/t eAg.
Inferred
| Metal | MVpSh | Contained Metal Quantity | Ore Grade | Ore Quantity |
|---|---|---|---|---|
| Gold | $6.14 | 626.94 K oz | 1.950 g/t | 10.00 M t |
| Silver | $15.12 | 98.06 M oz | 305.000 g/t | 10.00 M t |
Estimate notes: Underground resources from Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces, January 29, 2010.
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