china, page-4

I had a swag of these at one stage ... glad I sold out for a quick profit.

IMO the economics appears have deteriorated with the rising cost of crude oil and industry cost pressures leading to higher operating and capital costs. I'm not much of a mining guru though, and this is just MHO. The basis which I make these claims are:

-for capital costs, well take a look at asx releases by mining companies for the past month or two, cost blowouts everywhere.

-for operating costs, I did a google search and it appears the cost of diesel actually makes quite a significant impact on operating costs for some gold operations. Fellow Ghanian miner Golden star resources at least, appear to be heavily impacted by the diesel price:

(from their april 05 quarterly report)

Major Cost Savings from National Grid Power

"When connected, power from the national grid is expected to cost $0.06 per kilowatt hour (kWh), compared to $0.18 per kWh for diesel generated power at the current fuel price of $0.72 per liter. This difference should equate to a cost saving of approximately $2.00 per tonne of ore processed, or up to $80 per ounce of gold produced. Each $0.10 per liter change in the diesel price impacts power costs by $0.35 per tonne, or $14 per ounce. "

Those are pretty significant figures!!

I suspect open cut projects in remote locations are bearing the brunt of the soaring crude price as they appear to be the most energy intensive of them all.

Then there's the let down with the pace of development, as pointed out by tastarga.

At 40c the company has a market cap of 34.5m, with cash at end of last quarter of around 4.5m. With these kind of figures ... in the current environment ... I think there's a possibility the company is fully priced ... or worse.