So Nozz.... here is my response to your challenge :)My son did this. On his phone while I was talking and distracting him. It took about 30 minutes. Then he said he wanted to clean it up and would call back in 5 (took longer) minutes. He knows nothing about the company or the properties. He used Chat o1 instead of 4o. What do you think?
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Optimizing the Hammerdown Gold Project with Pine Cove Mill: A Cost Savings Analysis
The recent feasibility study evaluating the switch to using the Pine Cove Mill instead of Nugget Pond for the Hammerdown Gold Project reveals significant economic benefits. This decision impacts key financial aspects—milling costs, transportation costs, and capital expenditure—leading to a more efficient and cost-effective operation. Here’s an in-depth look at the estimated savings, with all calculations provided.
1. Milling Cost Savings
Switching from Nugget Pond to Pine Cove results in a notable reduction in milling costs. At Nugget Pond, the cost of milling is $48.06 USD per tonne, while Pine Cove’s costs are $26.24 USD per tonne. This leads to the following savings:
- Milling Savings per Tonne: 48.06−26.24=21.82USD per tonne
- Total Milling Savings: 1,189,000tonnes×21.82USD per tonne=25,949,980USD
Thus, the total savings in milling costs amount to approximately $25.95 million USD.
2. Transportation Cost Savings
Transportation costs are also reduced significantly due to the change in distance. The ore was previously transported 140 km to Nugget Pond, at a cost of $25.50 USD per tonne. Pine Cove, however, is 100 km closer, bringing the distance to just 40 km. Assuming a linear cost relationship, the new transportation cost is:
- New Transportation Cost per Tonne: 14040×25.50=7.29USD per tonne
- Transportation Savings per Tonne: 25.50−7.29=18.21USD per tonne
- Total Transportation Savings: 1,189,000tonnes×18.21USD per tonne=21,649,690USD
This results in total transportation savings of $21.65 million USD.
3. Capital Expenditure (CapEx) Savings
In addition to the operational savings, the project also benefits from substantial capital expenditure reductions. By not installing a comminution circuit at Nugget Pond and an X-RAY sorter at the Hammerdown mine site, the project saves $45 million USD in capital expenditures.
4. Enhanced Recovery Rate
The newly upgraded Pine Cove Mill is expected to achieve a recovery rate of 98%, compared to Nugget Pond’s recovery of 87%. This improvement of 11% means significantly more gold recovered from the same amount of ore, which will directly enhance profitability.
Total Cost Savings Summary
- Milling Cost Savings: $25.95 million USD
- Transportation Cost Savings: $21.65 million USD
- CapEx Savings: $45.00 million USD
Total Estimated Cost Savings:
25.95+21.65+45.00=92.60million USD Conclusion
The decision to utilize Pine Cove Mill instead of Nugget Pond brings major financial benefits to the Hammerdown Gold Project. The total estimated cost savings of $92.60 million USD, combined with an improved gold recovery rate of 98%, contribute significantly to the project’s economic viability and profitability.
These savings reduce both o