OTCPK:LSLCF - Post by User
Comment by
TheRock07on Jul 26, 2013 9:17am
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Post# 21632027
RE:Gold recovery jumped 45 % in Q2
RE:Gold recovery jumped 45 % in Q2Stunned, stunned and more stunned.
I normally do these simple calculations, but got caught up in the statistical minutea.
It does account for a substantial proportion of the production gains in Q2.
Both of these factors ( recovery rate, grade ) are costless, as the unit mining costs are unchanged.
The big difference is in the cash costs which will drop like a rock.
Let me illustrate using Q1 numbers.
In Q1, mining costs were $13.5 million and other costs were $4.3 million for total operating costs of $17.8 million.
Cash costs in Q1 was about $1240 per oz ( $13.5 divided by 10800 oz.
We know that there was a reduction of 0.95 million tons of ore in Q2 from recent output stats.
This will save at least $2.1 million ( cost was $2.20 per ton in Q1).
That is, mining costs were $11.4 million in Q2 but this still produced 16,200 oz of gold.
Cash costs ( in the conventional sense ) was therefore $705 ( $11.4 divided by 16200 ) or over $500 per oz lower than Q1.
That is simply huge
All other expenses in Q1 amounted to $4.3 million and these should not change ( if anything, it should go down due to cost compression measures ).
This amounts to $265 per oz for a total all in cash cost in Q2 of $970 per oz.....a huge drop from Q1..
This should provide for operating earnings in Q2 of $5 million or more..
Tks for pointing this out