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

To: peter snowdon who wrote (10701)	5/6/2006 7:34:32 PM
From: loantech	Read Replies (1) \| Respond to of 78421

In talking to management I think Genco's cost are about $55.00 per ton. But obviously I do not know what that includes as the average grade is about 600 g/T AG equiv. So at 8 bucks average for silver last year that would be $144 ton dirt, but then those numbers do not make sense as their profit was not that great. maybe that is extraction cost but does not include administrative or taxes or royalties or what ever. Jack can you weigh in on this please and give me a 101 intro to Genco finances? I know they make money but........ It seems like they make about 3 cents a share so sell at an 80 multiple.

To: peter snowdon who wrote (10701)	5/6/2006 8:23:22 PM
From: E. Charters	Respond to of 78421

That figure was very specific to narrow vein properties at that tonnage range, which is fair for narrow vein properties. Wider low grade properties get to defray their costs over a lot more tons. Open pits start to make sense when you consider the saving in labour costs. They do drive up capex in most ops, and require more drill engineering. People are attracted to them, but they are anything but simple. I like narrow vein a lot more because except for the labour problem it has a lot more flexibility and requires less overall cash if you are talking high grade small scale. Each case is on its own merits. Some open pit thingies can be said to be low cost because the mill money in heap leach thingies is small bucks. Rip and heap leach has its attractions.