Tudor Gold Corp V.TUD

Responding to a Question Concerning Econ (which I have lost)

[cskhurasu]

Is TC likely to be economic at current gold prices? That's the question to ask.

Let's be clear I have no special knowledge to make this determination...all I have is the data TUD has provided and the amateur's ability to do a back of an envelope calculation. So, recognizing that, let's take a run at it.

Avg grade = 0.7 GPT (I don't think the copper ends up in a salable concentrate so no AUeq)
Recovery = 88%
Gold price = US$1800
Strip Ratio = 5:1
Mining cost = US$2.00 per tonne (ore and waste)

Recovered value of gold per tonne = $36 (0.7 x 0.88 x 1800)/31.1 grams per oz
Less: mining cost of US$12 per tonne (1 tonne of ore + 5 tonnes of waste x $2 per tonne)
Less: US$2.50 per tonne of G&A

That leaves US$21.50 per tonne to cover processing costs, capital and shareholder profit.

Processing costs alone will eat up US$20 per tonne based on my limited undertsanding of metallurgy. There are many examples of refractory gold projects with processing costs well above $20 per tonne and none that I am aware of below $20 per tonne but I could be wrong. Even if you use their estimated processing cost of C$16.50, there is not enough margin to cover capital let alone a reasonable return on investment.

Where would I challenge TUD's numbers? The recoveries of gold at 88% are unusually high. You would need to see hundreds of confirmimg samples rather than just a handful.

The strip ratio is low since it is based on a pit slope of 50 degrees...very steep for such a deep pit. I think KSM is in the low 40s but it is not the same rock, it seems. A higher strip ratio would mean higher costs.

The processing costs look to be too low.

Can TC make it? In my opinion, using their reported numbers and at the current gold price, probably not based on my limited expertise. Better grade would help and is possible. Non-refractory ore would be a big help if it can be found especially at the front end of the project. A higher gold price is clearly needed and I personally am betting on that.

It's early in the process...a deposit like this takes years to clarify. Shareholders need to be patient.

[fordster]

Your questions are for another phase...but no one I know in the profession is abating their positions- that includes people who know. 'once again, get your professional with his credentials to post something that Rudy and you like. 'CSK....why why why do you keep asking the same question? My folks tell me no worries, but I simply will not quote them. Get your person here to state your

[GoldmemberBC]

"My folks tell me no worries" another day another gem by Fordster. No worries mate!

[cskhurasu]

Another thought. Scale back the deposit to the best 6-8 million ounces to increase grade and reduce stripping. This doesn't solve the metallurgical issues but it may be a better base to start from.

[fordster]

Tell Rudy great idea...we'll do that I'm sure.