Wow. It took me five pages to print your posting Doug A K. I'll try to be brief in my answers.
You have a number of postings that indicate that the cost of finding an ounce of gold is north of US$10 per ounce, and closer to US$20 per ounce. That is correct from my research, however recall, there are ounces of resources (measured, indicated and inferred) and ounces of reserves (measured and indicated). Each has a different cost profile. Companies have found that they can purchase gold reserves for less than US$10 per ounce risk free (assuming the numbers hold up to examination), so the trend in the past half decade has been to buy ounces, not explore for them.
If one has to explore for gold, then looking in the shadow of a headframe (or mill) is a good start. Many companies get a great second life from renewed exploration. Goldcorp's Red Lake operation is the best example I can think of that found an entirely new mine below the 1,000 meter mark at a mine that had been in production since the late 1930's.
Many mines go into production with 3 to 5 years of ore, however they almost always have some mineralization in their back pocket that the exploration staff has convinced management will become ore with minimal work. Examples here might include Agnico Eagle's LaRonde operation which looks like it can go forever, but isn't drilled off yet, or Cominco's Con Mine in Yellowknife, that started operations in 1938 with 75,000 tonnes of ore, but a staff that correctly realized it could reasonably continue for years to come. More than 60 years later, a few ownership changes, close to 10 million tonnes later, and still going, this "stope and hope" philosophy works, but only where the geology is well known. It is difficult to reconcile with current resource estimation trends, but investors can use this "off book ounces" to identify under reported resources.
Your other questions. I try not to comment on anyone else's work, unless I really understand what's going on.
Dave |
