Management is excited to announce that all of the expansion plans have been completed and that next year will be the first year in which we produce without consideration to construction and capital improvements necessary to put us in maximum production. We have made some significant steps toward achievement of our goals of 1,000 ounces per month of production for the entire year.
Our 2014 pad expansion has been paid for through our production of this past year. It is indicative of the ability of the mine to be fully self supporting and to begin to generate profits. Generally we believe that we are poised for the most successful year of our existence. With the improvements in place we believe that we can produce for the foreseeable future without further disruption.
Even with the production curtailed by the pad expansion and replacing our primary crusher, we achieved a 25% increase in gold and silver production. The increased production has reflected itself in our profit picture for the year. Through the end of the third quarter we had in excess of $500,000 in profits from our Honduran subsidiary despite working through an exceptionally heavy rainy season (note the photo of the full torrent pond following this post). Although the profit will remain at approximately the same level for the entire year due to the change over to the new crusher (as explained below), it demonstrates the significance of the changes made.
We have engaged a new crushing operation that will have great benefits for us in the coming year. The new crushing operator is also providing additional heavy plant machinery, and will be responsible for all of the ore operations from the ore body to the crusher and on to the pad. This has several great benefits to us: (1) The operator will be paid on a per ton basis so he is incentivized to move as much ore as he can to the recovery field; (2) The operator has committed to a 500 ton per day level of production. For that reason he is providing all of the employees necessary to excavate, load, truck, and crush the ore so he can control his costs and meet his production minimums; (3) The operator has purchased a new cone crusher to be able to meet our crushing specifications and at the same time meet the minimum of 500 tons per day; and (4) The provision of the other machinery means that the mine will no longer need to provide additional capital to increase the crushing capabilities of the operation. This final point is significant as we were planning on spending in excess of $1 million in capital to acquire those needed pieces of heavy plant equipment.
Management has already begun the process of recruiting suitable personnel and skilled managers who have a track record with established mining companies, to both increase the knowledge base of our mining operation and to fine tune the production and recovery phases of the operation. We currently recover approximately 70% of the gold in our ore and we hope that with additional examination and experimentation we will experience a steady increase in production due purely to increased efficiencies in the process.
As we look forward to 2015, it is management’s firm belief that the mine is now poised to give us the returns that will be necessary to provide a springboard to a liquidity event in 2015 coming from a merger with another mining company or a purchase of the mine by a strategic or financial buyer.
CLAVO RICO MANAGEMENT