OTCPK:MEAOD - Post by User
Comment by
mstettleron Aug 25, 2016 12:19pm
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Post# 25176369
RE:To be fair - cash cost. vs. all in cost
RE:To be fair - cash cost. vs. all in cost Wangotango67 wrote: When I calculate my estimations to mine the Barry Pit, I'm using a - cash cost - and not the - all in cost.
I guess I prefer the cash cost method, all because it provides s clear picture as to what it actually costs to mine a singular project - aside of the carry forward baggage the company drags along the way.
Why do I like this method ?
Well, the all in cost - in my opinion, and in my limited knoeledge of min(ng, just may include management wages, former debts from previous projects, etc... Which, in my opinion is valid and must be recognized, after sll, such expenditures are nessisary, to make the whole project happen, but...what if the other expenditures - management wages, running debts, initial costs to spark the project, and over all run costs are - hmmm what's that word I'm looking for - I don't want to say inflated - but you know what I mean... (Tease) yes... There are some companies that do like to ride high...
So, aside of the all in cost, I do think the cash cost has its place, to give the investor a clear picture to what it actually costs per each project, and hope like hell, the company keeps all other expenditures in check.
Heres an article - explaining the two stances...
I thought it was a great read. Enjoy.
https://www.theglobeandmail.com/globe-investor/investment-ideas/how-much-does-it-really-cost-to-mine-an-ounce-of-gold/article20709844/
At the end of the day it is the all-in sustaining cost that represents the true picture. That is why every mining company has switched to reporting in this way.
As you say the all in cost is inflated due to executive compensation, debts, capex, cost overruns etc. then that is still part of what it costs to mine an oz. In the case of MTO this is precisely why all in costs are so high.
Wanting to look at only cash cost is the same as saying 'I don't want to know the real story, let me play make believe that the company can survive when they are losing money quarter after quarter in a high gold price environment'.
Which is pretty typical on this board.