I think no one knows whether the ore can be
economically extracted, given the still-undelineated web of deep veins and related tonnage questions. The veins are rich, but whether GBG justifies its current level (much less a higher one) depends upon a yet-unknown comparison of the value of the ore proposed to be extracted, and costs. I am no mining engineer, but costs include man and equipment expense of getting at the ore, removing X tons of material, extracting the ore through shafts, then adding the crushing expenses, varying by host rock, and verifying a rate of gold recovery.
I noticed this one after the results last fall, but didn't buy because my broker's consulting geologist didn't like the economics. He's since changed his mind. I will likely buy in if some delineation of the vein network occurs that allows me a firmer basis to believe that sufficient tonnage is there, and the value of targeted ore is significantly greater than the costs of producing gold from it.
I realize there is a cost/revenue continuum of sorts for making a production decision, along which a project can be economic at various tonnage/richness/cost points. Within limits, only the result matters (the IRR plus available capital for that rate for that project). I realize GBG can get there more easily with rich veins, but there are other crucial elements of the equation for which numbers must be established or a basis indicated to project them.
I suppose how much of a speculator you are can roughly be gauged by how much (how early) you are willing to project those numbers, rather than have to see many of them before buying. I'll appreciate any knowledgeable posters' comments about the cost/value relationship for a producible orebody here, as soon as anyone knows enough to do so. I don't need a pre-feasibility study to buy--just more than I know now. At this point I'll stick with my PGD.TO, and just watch this board.
P.S.: Just think how much easier these deposits will be to visualize when real 3-D comes to the net!! |
