: In your January presentation the re-opening of Lupin mine
: is delayed to 2015. As I remember this project was
: presented as "fast track" with production commencement 2013 and later 2014.
: What are the reasons?
Thanks for your email. Yes you are correct we have pushed out our start-up date with Lupin. I wish, along with management, that wasn't the case but it seems markets are constantly changing. We have been aggressively marketing the company over the last couple of months giving both the company some exposure and us an idea of what's happening on the financial side of things. The reality is that the equity markets have dried right up, at least temporarily.
The two that we have wanted to accomplish in the coming 36 months is to both push our new mine plan at Bjorkdal forward and open Lupin as quickly as possible. Unfortunately both plans will require capital. Not a significant amount but more than the market will give us right now. To have Bjorkdal eventually produce 80,000 ounces a year, this will cost the company about $20 million and the restart of Lupin will cost us about $50 million. The markets seem to really want us to push Bjorkdal forward but not as much with Lupin. I have to attribute some of the 'northern negativity' to Newmont's 'Hope Bay' project.
It seems the market is very shy on projects with big capex right now and that Lupin is being painted with same brush as so many of it's peers in the north. However, in most cases, with the projects around Nunavut/NWT this would hold true however not in Lupin's case. We see Lupin as a very low risk situation with no downside. At the very worst Lupin has a mine life of 3 yrs, we pay back the capex and put $70 million into the company. If we find more resources, and we believe we will, we just keep mining it out.
What are plans are for Lupin this year is de-risk the mine so that others can see the upside. What we will do is open the underground, bring the analysts to site so that they can see for themselves for very little capital we can have this mine back in production. We feel they'll see that and then report back to the money managers of the world.
I hope this helps answer your question, please feel free to call me anytime.
Mark C Patchett
Manager, Investor Relations
Elgin Mining Inc.
#201-750 W. Pender St.
Canada V6C 2T7
Fax: (604) 682-3363