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Gold/Mining/Energy : ORXX - Orex Gold Mines Corporation

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To: Ga Bard who wrote (1457)	9/1/1999 11:36:00 AM
From: Tim Hall	Read Replies (1) of 2392

Gary, This information is from U.S. Bureau of Mines Information Ciruclar 9143 "Bureau of Mines Cost Estimating System Handbook" These are cost models and although they are over ten years old, they are still valid for comparison. Mining (100 ton per day, Shrinkage stoping, Adit Entry) Production Development $7.39/ton Mining of Ore $30.58/ton Mine Haulage $ .65/ton Mine Plant Operations $5.86/ton Administration $7.44/ton Total Operating $51.92/ton It won't matter what milling process is used, these mining costs will be the same. Flotation Mill (100 Tpd, 1 product) Comminution(crushing and grinding) $6.29/ton Flotation $4.29/ton Solid-liquid separation $5.37/ton General Operations $3.64/ton Administration $2.32/ton Total $21.91/ton The Haber process will have all of these same costs except for flotation. Instead of placing the ore in vats where the flotation takes place, Haber will place the ore in vats where it will be leached. The Haber process will also require the extra step where the gold is recovered from solution using Merril-Crowe or carbon columns. Everything else will be the same. If we assume that the Haber Process can be accomplished for 1/2 the cost of the Flotation process, the total cost would be $19.76/ton or a cost reduction of 10% in the milling process. If you look at the combined cost of mining and milling the total cost will be $71.68/ton, or a reduction of 3% due to the Haber process. With gold at $250 per ounce, the operation will need a grade of .29oz/ton just to break even. Also these costs don't include allowances for reclamtion, or the costs of capital and they have not been adjusted for inflation over the past 10 plus years. The Haber process would probably be more competative against a heap leaching operation but that is not the kind of test that is going to take place at SMM. Also the ore at SMM is completely different from the ore encountered in the big heap leaching operations. Tim

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