"although I have no idea what a good grade is"
I reckon a good grade is dependent on the characteristics of what the deposit has and metal prices. I translate grades into $ per ton. gold and silver in ounces per ton is easy. Base metals I use 1% = 20 lbs and go from there. then I compare with mining/milling/smelting costs.
Deposit characteristics are size,esp. width, continuity (are mineral values continuous), surface or underground, metallurgy and geog. location.
Very rough costs per ton of ore are: surface (1:1 strip ratio)500 tpd $17, 2000 tpd $9.25, 10,000 tpd $4.10, 40,000 tpd $3.00 and 80,000 tpd $2.50. Add 50% each time you double the strip ratio. Cap. cost per ton of daily production run from $4200 for 500 tpd to 900 for 80,000 tpd.
Undg. gets a lot more complicated. Narrow vein 200 tpd costs about $80 per ton to $40 for 2000 tpd.
Wide ore zones go from $22 for 1000 tpd to $13 for 14,000 tpd.
block caving undg can be as low as $5 for 40,000 tpd. Capex per ton of daily prod. runs from $75,000 for 200 tpd ops to $4500 for 40,000 tpd.
met costs vary from $2 per ton for 20,000 tpd heap leach to $6 per ton for a 20,000 tpd conv. mill to $60 per ton for 100 tpd conv. mill.
To use your example of .24 oz per ton = $144 per ton for $600 gold x 90% recovery = $130. If there are 10 million tons that can be open cut and heap leached at say 20,000 tpd we are looking at $3.50 + $1.75 (assume 2:1 strip ratio) = $5.25 per ton mining cost plus $2 for leaching = total op cost of $7.25/ton. plus capital cost of $60 million/10 million tons = $6 per ton. total = $13.25 vs revenue of $130. fabulous mine!
However if the ore is narrow (say 20 feet) and has to be mined from undg. at 500 tpd. cost is $60 to mine. And if it is in the sulphide zone and has to be conventionally milled = $35 per ton plus capex, it will not make a mine.
IMO, the Staccato looks too small. But I caution that this is just my opinion and I have only looked at the data cursorily (sp?). There are so many companies with interesting projects, one can not study them all.
And no matter what you figure out, good promo and a story that captures the imagination can make the share price go ballistic. |
