RE:what does this meansilverT,
What it means is that this management is being very conservative in their all in sustaining cost estimates, and any capex expenses during each quarter are expensed during that quarter.
In the calendar quarter ending March 31, Don Mario had a total all in operating cost of $719 USD per ounce of gold, and had revenue of $1,112 USD per ounce of gold, so the profit margin per ounce of gold was $393 USD. Add in $172 USD per ounce in depreciation, and the cash operating margin at Don Mario was $565 USD per ounce on total gold sales of 8555 ounces.
Last quarter, Don Mario's all in operating cost was $836 USD per ounce (using the same by product calculation), but gold revenue per ounce was only $521 USD, so Don Mario had a loss of $314 USD per ounce of gold. Add in last quarter's depreciation of $438 USD per ounce, and the cash operating margin was $123 USD per ounce. So profit margins increased by a factor of 4.5 quarter on quarter.
At EVBC, the all in cost of production was $1529 USD per ounce on a by product calculation, and El Valle generated gold revenue of $1059 USD per ounce, so the margin per ounce was negative $470 USD. Add in depreciation of $323 USD per ounce, and EVBC lost $147 USD on each ounce of gold produced.
In the last two quarters total production cost per ton milled has dropped from $180 USD per metric ton to $147 USD per metric ton. But revenue per metric ton milled was only $103 USD per metric ton at an gold ore grade of 2.5 g/t. Take the average ore grade up to 3 g/t at El Valle, and revenue per ton of dirt increases to $150 USD at $1300 USD per ounce gold.
The turn around at Don Mario was largely unnoticed by the market until very recently, and the same can be stated about the turn around at EVBC which is in progress and should be complete by the end of this fiscal year in September. Given that the high grade oxide areas of El Valle grade between 6 and 7 g/t, there is plenty of scope for increasing average ore grades, and IMHO, we could see 4 g/t average grades in 2018.