(since commercial production was declared)

 

Q4`12  -  5,175 ounces produced

Q3`12  -  4.329

Q2`12  -  4,813

Q1`12  -  4,777

 

The new Operations team was not annouced until November 16, 2012.  As such, Q4 likely does not reflect the full operational benefits of changes implemented.  Most likely, the brunt of the benefits were not realized until late December to early January timeframe.    

 

From the January 13, 2013 Corporate Update Newsletter:

``Gold production from the leach pads has improved meaningfully with increasing solution grades and an increasing number of ounces adsorbing to carbon. This is a direct result of a leaching optimization program that was initiated in November and December of 2012 by the new site management team.``

 

Lately there have been some chatter about potential of production reaching 100 ounces per day.  Using 365 days of leach pad and ADR production, that would give us a 36,500 ounce run rate per year.  Production of 80 oz per day would give us about 29,000 ounces and 90 oz per day would provide around 33,000 ounces.  Now, they are ramping up in 2013 to reach a gold production rate that they hope will approach 35,000 to 45,000 oz per annum.  I think that means the plan is to implement the changes in 2013.  I think the timing of when they deliver actual annual ounces in the 35,000 to 45,000 oz year range will depend on how quickly they ramp up progresses (and they are able to sustain at that level).  I think the focus should be on how quickly the sustainable annualized run rate ounces reaches the 35,000 to 45,000 oz range.  For example, if they can sustain 100 oz per day in all of Q1, and feel comfortable with ore feed at that level for the foreseeable future, then perhaps we will be in a position to make that declaration come mid 2013 (strictly from an annualized run rate standpoint).  On the other hand, if they average 70 oz per day in Q1, 80 in Q2, 90 in Q3 and 100 in Q4 then we probably wouldn`t be comfortable making that declaration until Q4 2013 or early 2014.       

 

The 5,175 oz production in Q4 2012 averages out to about 56 ounces per day (average likely before realizing most of the benefits from the recent changes).

 

From the last NR:

``NWM has completed one year of commercial production and is preparing to ramp up in 2013 to a gold production rate that will approach 35,000 to 45,000 oz. per annum.``

 

Specific changes be implemented by the new Operations team (from the latest NR):

 

``*  Significant improvement in understanding of Lluvia de Oro leach kinetics and ore types

*  Modifications completed to ADR columns to improve gold production capacity

*  Modifications completed to EW circuit to improve gold production capacity

*  Modifications to solution piping and leach pad irrigation to improve gold production capacity``