Gold recovery aka deadlly pup:
Gold producing companies calculate their costs in US dollars per ounce recovery.
The recovery ranges vary greatly depending on locations, chemical costs, fuel, labor, taxes etc. No two projects are alike.
Modern cyanide heap leach is the cheapest, while floatation is considerably more expensive. I have seen costs vary from $80/oz. in 3rd world countries ..... to $750/oz. with some of the companies I am familiar with in North America.
So to answer your question about 0.5 gpt at approximately $28/ton value. 31.1 gpt equals 1 oz. (or 31.1 tons are required to produce 1 oz.. at 1 gpt) At 0.5 gpt it would require twice as may tons or 31.1 X 2 = 62.2 tons to produce 1 oz. gold.
Let us assume the the total recovery cost is a very realistic $500/oz. for the 62.2 tons.
Then $500/62.2 = $8.04 to treat and recover 0.5 g of gold per ton. This would leave you $28 - $8 = $20/ton profit at 0.5 gpt.
Obviously you wouldn't dig only one ton of rock for $20 bucks, but when the "bulk tonnage" is in the millions or hundreds of millions of tons, even at levels below 0.5 gpt there is huge profit to be made. (Cost per ton for treatment also goes down with larger tonnages)
Also add silver/copper/moly zinc/nickel or whatever other metals are recoverable and profits esculate considerably. Thus ore value soon can go into the billions of dollars value very quickly even when results come out below unrealistic expectations of share holders.
The $8/ ton cost only goes up slightly when gold values go up from 0.5 to 0.7 to 1.0 gpt. etc. but the profits at 0.6 gpt. is %20 higher than 0.5 gpt.
From the above you can see in the Mikwam property results, that the potential value is enormous.
Almost all Uranium properties in Sask. have anomolus gold/silver and other metals.
But all proven technical indications are that the Donna is a sleeping beauty with perhaps much greater "bulk" tonnage potential, but at present we only have good indicator grades. However, if they hit any kind of source material, there will be a lot of weeping and wringing of the hands, and a lot of "if only" scenarios for those who played the pennies!
Assuming costs per ton for the BC Donna property follow other BC properties we could reasonably expect recovery cost to be $350-$600 oz. perhaps a little higher at start up. It is too early to say if they will have the magic million oz. ore body, but it is not an unrealistic dream either, in view of what we know at this point. Hence the $64 dollar question.......do I invest now while share prices are depressed? or am I prepared to take the consequences of missing out when they soar?
Jr. ventures in general are high risk, but the paybacks could be huge.....that is for the bold! Hence each individual would be wise to do their own research, consult credible money managers, and generally DO your own personal Due Dilligence!
Solver