RE:RE:RE:RE:RE:RE:RE:RE:Question for Miningman... Oh , you want to discuss mining economics do you??? Like most of the generalizations on this board , there is a grain of truth in your ideas but it doent stand up to detailed review.
From the Q4 report , 373,954 tonnes were milled at a total cost of $89.6 million. That works out to $ 239 per tonne. The same report stated that the average realised price for gold sales was $ 1480 per ounce.
In round numbers there 31 grams per ounce so realized price was $47.74 per gram. Each tonne of 5 gram ore is therefore worth $238.70 per tonne!!!!
Halleyula, every tonne of 5 gram material just breaks even!!! No profit but no loss either. So yes , chosing 5 grams as the cut off grade was the correct decision.
Yes todays POG is $1570 but Q4 sales included some days where POG was over $1600. Its the refining and smelting costs that account for the differences and Q4 report also included an acknowledgement that these costs were escalating due to the increasing volumes of concentrate that required processing.
Now the good news is that $239 per tonne is an improvement fom the first three quarters of 2019 which ranged between $250 and $270 . So Joe and his pals did something right, but Ive got a sneaking suspicion that this improvement was largely due to ecomies of scale as daily tonnage moved from 3200 to over 4000 and will rise again as tonnage reverts to 3800.
So going forward , somehow costs have to be kept at present levels if 5 gram material does not become money losing waste.
Enjoy your vacation , Im going shopping for a new truck this weekend.