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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (8837)	4/4/2006 11:39:19 AM
From: ogi	Respond to of 78417

It is not a bulk mining scenario,more of a cut and fill type but it is still early. The Soh results are very attractive for this type of mining. I am only concerned with building the resource numbers and identifying the prospectivity of the many many mineralized corridors on this property. Of course Claude'a comments would be welcome. I believe he is aware of Soh, his one caveat as well as mine has been the sloppy share structure which is being improved as the stock has changed hands significantly in the past 6 months. Cheers, Ogi

To: loantech who wrote (8837)	4/4/2006 12:09:53 PM
From: E. Charters	Respond to of 78417

28 feet wide = 28/12 = 2.33 short tons per linear and vertical foot. 237 dollars per short ton gold 31 dollars per short ton silver A stope 2.333 tons wide X 343 feet long X 200 foot lift = 160,000 tons. It recovers at 90% 268 X .90 X 160,000 = $ 34,272,000 CDN It costs 60 to mine and 20 to mill underground or CDN $12,800,000 Net metal revenue on mining = 21,470,000 Smelter costs are 250 per ton. Shipping is 20 dollars per ton. Con ratio is 20. So, over original tons we get 260/20 = 13 dollars per short ton smelter cost to mined tons. Assuming they get 100% of world price for metals and they get back 90% of the metal delivered to the smelter, then we get 21.47 mill X .90 - (160,000 X 13) = 19,390,000 or 121 dollars per short ton profit. Now I doubt that the grade will hold at these kind of figures or they would have another Hemlo. What kind of leeway do we have? Hard to say. Mining/Milling costs have to be predicated based on bulk methods which after capex is retired can be quite cheap. How cheap? Well maybe 50 dollars all up per short ton. Depends on tons and total scale. Often the computers have to run 4 scenarios of mining for several months before the close on a fease and it surprises everyone. Metallurgy, dilution and rock comminution costs are big factors as well as labour, infrastructure and cap costs. Probably at 5 grams gold "equivalent" they have a mine. There is no real equivalent, as pay for base metals is not what you see in metal price books. It depends on the smelter, recoveries, where the silver and gold report to, what the recoveries are for various metals in flotation and smelting and costs associate with recovery of that metallurgy. It varies. Copper-zinc is good, but often the gold recovery is abysmal, less than 60%. Zinc-silver used to be very hard to make money on. Bear ore. Pb Ag is good as is Cu-Ag, but cyaniding silver and gold out of Pb or copper ores can be a "bear". Mexican silver mines had high milling costs. They needed high silver grades to survive. If you get gold and silver together, often the grind that recovers gold well will lose silver and vice versa. Silver needs a light grind, gold often a fine grind. The compromise recovery could be only 70%. In cyaniding, slver needs lots of hours, gold does not benefit from more hours past a certain point and you could get precipitation losses. EC<:-}