TSX:COG - Post Discussion
Post by
nozzpack on Jul 21, 2023 2:43pm
Open Pit Grade is Why La India will fetch high Price
The average head grade at primary open pit gold operations reached a 10-year high of 1.46 grams per tonne gold in 2017 and has fallen every year since.
By 2021, the average grade had dropped by 8% from the peak to 1.35gpt.
Metals Focus said the rising gold price was partly attributable as miners lowered cut-off grades.
The average open pit grade in 2021 was 1.29gpt gold, down 16% since 2012, while the average underground grade was 4.15gpt, down 20% since 2012.
La India has over 2 million ounces in its open pit, averaging 3.8 grams per ton.
This grade is three times the average open pit mine in the world.
As many know, grade and cash costs are inversely related .
Open pit mining costs are about the same per ton regardless of grade.
In other words, at $40 per ton mined, La India will cost just over $10 per gram to mine = $310 per ounce , versus the average open pit will cost about $30 per gram
to mine which is $30 X 31 grams per ounce = $900 US per ounce .
This makes a huge difference in cash flows which is why over a dozen parties are
seeking to buy La India.
Of course below the open pit is the source gold lodes of the oxides in the open pit.
This is not even considered yet but those grades are about 6 grams
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