Do you think "boots on the ground" is the only cost of production?
What about machinery, fuel, ventilation, drill and blast ?
Is that free? You need to do a simple maths equation.
85tpd x 4.5 gpt = ? (382.5)
That will give you a daily amount, the max. that can be processed per day, at your grades.
365 days in a year/2 as production is going to be a week on/week off.
182/4 as there are 4 qtrs. in year =46 days production
382.5 x 46 = 17,595 grams per qtr.
17,595/31.103 (grams in 1 oz) = 567.7 ounces per qtr.
Gold is NEVER 100% pure, but at the high end 96%
Therefore 567.7 ozs x 96% =545 ozs of gold.
Recovery through processing is never 100%,
so lets guess at 90% recovery =490 ozs per qtr.
If they can get $1,750 per ounce = $857,500 for the qtr,
barring any downtime/breakdowns, routine maintenance.
If staff and admin/corp costs are $1.1 mill per. qtr,
they're already mining at a loss of $242,500 per qtr.
Then machinery hire, fuel costs, explosives, (just a few of the many)
costs involved in mining, how much does that leave them?
4.5 gpt is a LOSS.
AS for the following...…………
"
"$1.1 mill, plus cost of production = $$???"
As addressed above its not plus.
"So what grades will they need to process, just to break even?"
As addressed above.
"Are they going to do their own mining or use contractors?"
I presume a mixture of both where appropriate.
So you're saying the cost of "boots on the ground"
(staff costs) is production costs?
You presume a mixture of both contractors and their own machinery
for production.
Who is going to pay for all this, it isn't allocated funding anywhere
that I can see, therefore qtrly they NEED …
"
"$1.1 mill, plus cost of production = $$???"
"
(not only do they have to pay a mining contractor,
but they still have to pay for machinery that is sitting idle, one week out of two.)
Your $205 figure, that you've noted from item 6.1 is just an extra payment,
included in payments at 1.2. It is
NOT a separate payment.
Go through the financials, it is part of …..
Consolidated statement of cash flows Current quarter $A’000
Year to date (6 months) $A’000
1. Cash flows from operating activities
and is portion of payments at (1.2)It certainly isn't just the gross amount paid to directors as you're suggesting.
10 gpt, depending on how much a contractor charges to do the
actual mining, would be the absolute minimum break even amount.
