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First Asset Morningstar Emerging Markets Composite T.EXM.A



TSX:EXM.A - Post by User

Comment by kroghon Dec 07, 2006 3:56am
300 Views
Post# 11821288

RE: High grading

RE: High gradingThanks for your replies. I guess we disagree on this point. About the experienced miners that don't grab the high grade and run. This must be due to mining issues, like the low grade ore being placed on top of the high grade ore. If they just take the high grade and run, they will ruin the possibility for mining the rest. Such cases are clear. But suppose that there is a choice of which order to mine, then the reasonable choice is to high grade. If metal prices are falling, it is very clear. But even with rising metal prices it is still better to high grade, because the early high profit can be used for exploration and acquisitions. If a mining company has two deposits to choose between, which one will they mine? They almost always choose the high grade one. The history of mining is one of starting with the high grade deposits and only after depleting them go on to lower grade deposits. We are mining lower grades today than 100 years ago, and that is quite rational. Similar reasoning is rational within a given deposit. Coach ,thanks for your reports from Mexico. I am looking forward to hearing more. Cheers and good luck to all EXM shareholders.
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