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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 398.55-0.2%4:00 PM EST
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To: TobagoJack who wrote (95540)10/16/2012 2:00:52 AM
From: energyplay1 Recommendation  Read Replies (1) of 218562
 
Re: Gold refining economics.

You have a really great set up there, without that ice cold frosting our Canadian friends have to deal with.

Remember that in this business you are always Price Takers.
You can't improve the product to get a better price.
You also get whatever price electricity, diesel, cyanide, etc. goes for.
There is a little flexibility in wages, but not much.
Every so many years the prices will move against you.

So once enough drilling has occurred to prove up more ore, you may want to sell
a little bit forward (10 - 25%) for number of months or even a year to lock in a large
part of the price and profit.

It is very possible that some politicians (most likely European this cycle) will do something
stupid and knock 40% or more off the price gold.

The other way to hedge is just to keep cash in various currencies around.

Since you are thinking about flipping, and the buyer may need financing, at that point you might want to talk to the buyers bank to see what degree of hedging they would like to see.

* * *

Besides gold and silver, what is in the rocks ?
There is lots of good stuff in your part of the world.

Also, after you get this flipped, you might want to do some other mining / prospecting project in Australia...
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