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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jim Steel who wrote (3008)4/10/2002 7:45:26 PM
From: tyc:>  Respond to of 39344
 
Thanks for your reply. One of these days I'll get it right !

Producing 295,000 oz of gold; gold goes up 2.85 per oz; revenue increases by $840,750.

Producing 84,000,000 lbs of copper; copper goes up by .01c per lb. revenue increases by $840,000.

Therefore a .01c increase in copper price is equivalent to a $2.85 increase in the price of gold.

(UNLESS some of the increase is grabbed by the smelter, Do smelter charges enjoy price-change participation ?)



To: Jim Steel who wrote (3008)4/10/2002 10:08:09 PM
From: tyc:>  Respond to of 39344
 
One afterthought !

Jim, you made a valid point when you warned not to look for a "gold multiple" for copper production.

So perhaps its more reasonable and conservative to look at the situation as a copper producer. At todays prices, the cash cost of $175 set against a gold equivalent price of $308, is like a copper producer whose cash costs are (175/308 times .72) = .41c per lb.. Still pretty darn good.


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