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Orex Exploration Inc. V.OX

"Orex Exploration Inc is engaged in the exploration of gold mining sites located in Nova Scotia, Canada. The Company owns goldboro project in Guysborough County, Nova Scotia."


TSXV:OX - Post by User

Bullboard Posts
Comment by thegoldenchildon May 19, 2010 8:38am
419 Views
Post# 17112387

RE: OSK Economic Grades

RE: OSK Economic GradesSailor, I think a lot has changed since the NI43-101 report was issued last  year so it's safe to assume that the economics of resource may be looking better. By definition,

Cut off Grade is the minimum metal grade at which an ore body can be economically mined. Let's say that at 0.36g/t gold at 1200$ per ounce, we have a ton of rock worth:

1200 x 0.36g/t / 30g/ Oz = $14.4 would be the amount required to mine and process one ton of rock. In effect at 0.36g/T, there's no profit. When the last NI43-101 was issued, gold was trading much lower and perhaps the price of gold used was 600$/OZ so you would need at least twice as much in the cut off to mine the ore economically, perhaps 0.75g/t or 1.00g/t.

What else has changed? We're in a recession so it's safe to assume that the cost to build the mine has dropped significantly, they now have the values of the drills that were accounted as 0 g/t with a value closer to 1.25g/t. I think the key may be that they're now able to incorporate the nugget effect into the overall grades. If they 'e able to better address this issue, the economics of this resource will be amazing.

Past smaller bulk sampling by Placer Dome revealed possible grades in the order of 4.5g/T. We're now confident enough to use a cut off of 0.36g/T, we're left with an excess of 4.0g/T profit before taxes. At 4.0 g/T Au we're looking at:

4.0g/T x 1200$ /Oz / 30g/Oz = 160$/T, to put this into perspective, every bucket of ore is worth about $160 which is quite amazing as crushed gravel sell for $10/T and it's a profitable business.

I think the market conditions have somewhat made Golboro more economical and I was happy to see the 0.36g/T cut off as very encouraging too. GLTA, I think this project will rocket into high gear in the next couple of months, you won't have to wait years :)



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