High River Gold Mines Ltd HRIVF

RE: question

[bart_dc]

hi topoftheridge,
a mine has both fixed costs (depreciation of machinery among other things) and variabel costs (chemicals for exemple).
If less rock is processed the variabel costs will be lower, in line with the lower volume so this would have no impact on the cost/ounce.
The fixed plant costs however are a fixed amount per month which can be calculated per ounce produced.
If half of the normal volume goes through then the fixed cash cost per ounce will double.
So down time would indeed make the cash costs go up.
People are too often scared by an increase in cash costs but they should first look at the reason and afterwards start to panic (or not).
In the case of HRG you should not panic.
Q4 will show 5 cent profit, mark my words,