RE:Do you think is economical?terryshan wrote: So I'm not a mining guy by trade, so still learning as I make mistakes here and there.
Initially I thought, wow 8 million ounces of indicated gold --> that's $10B at current gold prices, but then I realized the grade is only 0.55gram/tonne, which anything below 1gram/tonne is pretty much not economical...plus I was told by a colleague who ran a small mining company before just like EGX that Ecuador isn't a favorable place for gold exploration... but again he wasn't so certain as he hasn't been in the game for sometime.
Knowing all of these, I'm not so sure if PEA will sent shares flying. Also keep in mind, 8 million is indicated, so there are a lot more holes to drill to show proven reserve considering grading is extremely low...
Any expert here to shed some light on how this can play out?
Cheers
Welcome aboard Terry. I have to say this is stuff to research before you invest but as your here and asking, I will answer in short.
Economical is a term in general. On a mining scale, the high grade mines of the world are slowly being depleated and large deposits of low grade a becoming more and more popular. Now, above 1G/ton would be economical say in the states, where as our .55 would likely not be. We are in Ecuador and the cost to mine is significantly lower. Our exraction rate is good with about 80% recovery rate.
Ecuador, fuel is very cheap. We have an open pit mine compared to more costly sub terainian mining like FDN.
Ecuador was once not a favourabe country to eploer and mine due to tax laws. There was a huge 70% windfall tax among others that hurt companies and made it almost impossible to make profits. Ecuador has now changed those laws to much the same as he rest of the world.
Once you figure out what we have for total resources, the extraction rate, we have about 15 Billion dollars worth of resources indicated in the ground. It will be very cheap to mine as Electricity and fuel is extremely cheap in Ecuador.
The PEA will reflect all of this. I am going to repost a little work I did last week as your new and will help show what we have for resources. Do some DD on Ecuador and Good Luck!