1. Nearly all financial sensitivity analyses I have seen for mining projects show that the projects are typically least sensitive to capital costs. Opcost, grade, commodity prices are top of the list. If the orebody is good enough, the capital cost becomes inconsequential. Grade is a very deserved king.
2. The stock market valuation of a new discovery is normally well and truly established by the time a company issues its first resource statement. The market is extremely efficient at picking the value of a project well before a mining feasibility comes out. Just look at a 5 year chart of a single project mining company developing a project. The share price highs are nearly always reached in the early phase of discovery and drill out. So what does this mean? As a resource company investor/speculator, the biggest returns are well and truly made the time a mining engineer gets involved. That’s why you don’t see many discussions on this forum about cut-off grades.
