RE: cash costsCash costs are listed in their PEA as $430 an ounce for the life of the mine, but in the first year they are only $234 and in second they are $320. Management says these are based on gold prices being $1000/oz. If gold prices are higher at the time of mining, economics change in that material that would be waste at lower gold prices becomes ore. Thus more ounces would be produced in a given year and presumably costs per ounce would fall.
I think these figures(from the PEA available on the web site: the Tech Report from Jan/Feb of this year) incorporate silver credits but not base metal. I'm told base metal recoveries will be considered in a future mine plan. Following the completion of gold mining and leaching the pads will have "hundreds of millions of pounds of zinc and millions of ounces of residual silver, as well as quantities of residual gold" and as this material is already mined and crushed it would seem that reprocessing would be relatively inexpensive. "This could add many years of significant revenue."
Some of the surface sampling results released in March by Oroco were in an area that is within the pit design ("a surface sampling program from 150 north, being the southern edge of the current resource area, along approximately 500 metres of strike extension to line 350 south.") but this area hasn't yet been drilled. Given the high grades and good widths I'd say this has a fair chance of adding ore and ounces within an area where the current PEA is already counting mining costs. Here too what is currently incorporated in the mine plan as waste, will in fact yield more ounces of production, again lowering costs. It seem sensible to also add the additional 350 meters of strike length to the south of this, were more good grades and decent widths were reported, as a source for more ounces of production that aren't yet incorporated into the mine plan. This is at or near surface material, so I'd expect the ounces here to be low cost.
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