While we wait for PCF Capital to shortlist the offers for funding for Mt Kare's adit to be finalised.
below are the sorts of numbers they are looking at regarding their ROI and Discounted Future Cashflows, with the Gold Price falling to $1173/Oz, Mt Kare’s ultra low cash cost of less than $300-400/oz @ 10gpt and half that at 20gpt makes it an extremely profitable Gold Mine.
Here is the explanation as to why Mt Kare will generate Billions of Dollars in the first 5-10 yrs per year even as almost 40% the other Gold Mines on the ASX will be making a loss!
There are less than 20 Gold Deposits in the world with 10gpt and 1Million Oz+.
Mt Kare already has 507,000Oz @ 10gpt and Rodan hasn’t even started drilling into the Bonanza Zones yet from the Adit.
While around 40% Gold Mines on the ASX are now at a loss, Mt Kare will still be happily pumping out Gold Bars at a cost of $350-400/Oz is still making an extraordinary $840/Oz+ profit per Oz!
At 20gpt, this cost falls to approximately $180-250/Oz and at 30gpt the cost falls further to $150-180/Oz!
As Such At the Current $1173/Oz Gold Price Mt Kare's profit at the Grades and Volumes listed in the Table Below would generate:
That is why Gold Grade so important and why Mt Kare is so rare? Read below:
If you look at the Production Plan from the Adit for IndoChine Mining’s Mt Kare, once the Mining License is granted, it shows that the company will process 750,000 tonnes of rock per annum. As such at 10 grams per tonne, they will produce a conservative 200,000 Oz of Gold at $US350-400/Oz!
How do you work this out? 750,000 tonnes x 10grams per tonne Gold = 7.5Million Grams Gold
Dr Tony Burgess, IDC’s Head Geologist found 16Million Oz of High Grade and Bonanza Grade Gold at Porgera in small jewellery boxes and high grade zones.
He did this by infill fan drilling these zones to increase the Total JORC Resource and increased the Gold Grade from 10gpt to 30gpt. When production began, it started at 78gpt!
Same as what Burgess and Rodan are planning at Mt Kare Below
If you punch 20 grams per tonne and 30 grams per tonne into thesame 750,000 tonne rock processing plant you get the following annual gold production rates, at half or less AISC from the $350-450/Oz at 10gpt.
This is what makes Gold Mining completely different from Bulk Commodities (Iron ore Coal etc). Because such a small amount of Gold 31.1grams is worth $1100-1200/oz any increase in grade creates enormous profits from existing infrastructure.
This is exactly what happened at Porgera.
They bought machinery that was supposed to produce 500,000Oz of Gold but as their Gold Grade exploded in (Green line Below) the first few yrs, see chart below, their produced over 1.2Million oz of Gold (Brown Line) @ $60-90/Oz PER YR (Blue Line)!
Cheers DM
IDC Price at posting:
1.4¢ Sentiment: Buy Disclosure: Held
