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

To: MICHEL GUIBERT who wrote (63277)	2/4/2009 3:35:15 AM
From: marcos	Read Replies (1) \| Respond to of 78419

'G & A' = general and administrative expenses ... management and staff salaries, office expenses, legal, auditors, exchange costs, promotion, travel expenses, stuff like that, everything that can't be applied to 'cash costs' at a specific operation ... and 'Corporate' would mean it covers the main holding company not the subsidiaries, which wouldn't have a lot of g&a in this case

To: MICHEL GUIBERT who wrote (63277)	2/4/2009 7:31:16 AM
From: E. Charters	Read Replies (1) \| Respond to of 78419

General AND Administrative. Overhead costs not related to production directly. It could refer to all operating expenses excluding interest, depreciation and amortization, but I think it means in this case overhead due to administration, management and office. So advertising for employees, utility bills, rent, telephone, staff salaries at head office and plant office, office furniture, promotional expenses, turning out company report, accounting, legals, as long as they related to management activities. As long as it is not related to production. It is a cost accounting term to determine what is production versus command and control. Sometimes in joint ventures and net profits agreements it is necessary to identify it within narrow terms, so it is set at a particular percentage. The defining part of its whether or not it is directly related to production. It is hard to separate because without administration you cannot run a business. The amount you need, as in training. is an unknown until operations are mature. If it includes commissions, travel, entertainment, selling, etc, is called SG & A. You also get into allowable and unallowable costs. This is really confusing, as both are G and A, or overhead, but some can be deducted and some cannot. EBITDA is the sound a gross frog makes. It is non GAAP. EC<:-}

To: MICHEL GUIBERT who wrote (63277)	2/4/2009 8:48:53 AM
From: E. Charters	1 Recommendation Read Replies (1) \| Respond to of 78419

It is really tough to figure the recovery unless you know the mining method, the dilution, the nugget factor, the metallurgy and the plant recovery. Dome in Timmins made about 95% recovery, but its drilled ounces versus delivered to head were about 100% out. In other words they drilled say 100,000 ounces, and recovered 200,000. That is what is termed an extreme nugget effect. Historically the grade delivered to the mill for the past 100 years in Canada was the average assay in the ore zone. This is subject to mining practice and stope control as well as rock and hanging wall criteria. But this was the average. The average assay in the ore zone is irrespective of length of the intersection, but was based on mine practice. It was never officially calculated as grade. Usually they did grade width and then polygons or area grade. But if your hole spacing is dense enough and you do 30 gram fire assays, your average assay irrespective is more accurate. It can be 10% higher to 30% higher than grade X width calcs or kriging. Some mills did sparse drilling and kriging in the 80's and 90's and could not find ore in the mill. They blamed it on milling, but some geos thought the ore was simply not there. Overestimated. How could this be so in the light of normal mine practice being light on the head grade? Well this sort of grade overestimation happened at the second Dome super pit too. The answer may be in sparse non geometric drilling and not enough short length fire assaying. A good thing to do is to assay your cuttings and not give much weight to core assays, especially anything below N or H. Cuttings are also closer to mine grade. This raises the troubling question of what method was used to arrive at grade in some of the failed mines, such as Colomac. Drilling was very sparse. Normal assays should have underestimated grade. Some thing happened mathematically supposedly in the grade statistics to throw the grade upwards beyond what it should have been. The only other solution could be that structure was ignored in favour of math to guess as gold content. Structural variations should be factored mathematically into variograms or kriging as a factor that limits or modifies variables. In other words you have to first elucidate the variations according to fabric, and then go after the grade variations within that fabric. The holes have to maximally intercept this fabric for grade condemnation/estimation. Then you have to line up on that fabric and mine it by the numbers/geometry. Perhaps the mining of what had gold in it was missing. Structure the layman thinks of as simple, whereas the mining engineers knows it is a dog's breakfast and takes years to elucidate in some cases. So how many ounces will they mill? Tell me how many tons and the grade, and strike length and what camp it's in and I will give you a guess. It could be 75% and it could be 125%. That development capital looks really low. The total tax too. It has to be Quebec, but if there is no flow thru, the tax will be higher than 34%. A rule of thumb in a well run operation, is that you can figure half the cash flow to costs, and 25% to the shareholders after taxation. The McIntyre mine did not make that. Hollinger did. Their corporate tax was higher for the latter part of the mine life, but mining taxes or what are called royalties in other jurisdictions were lower. The mining tax is levied on profits with certain deductions. Provincial corporate taxes are low in Quebec for instance. It is fairer on high expense mines, but may run 4% or better on high profit ventures. We don't have depletion allowance anymore in Canada. They do for oil which is not fair at all. But to have deductions differing for mining tax and corporate sounds unfair, but it is a function of the province levying the mining tax, but Ottawa levying much of the corporate. Ottawa revised their tax structure from the infamous Carter Commission, which recommended increased taxes across the board. The resultant taxes on mines, and share issuers (capital gains tax) brought our exchanges from the world leader in volume and our country from the destination for investment capital to a marginal side show. Canada had an equal economy to China back then. (1968) Now Spain has just about surpassed Canada in economic strength. At that time Canada had 2.3 times the economy of Spain. It took China 4 years since the Carter Commission taxes and massive government spending kicked in with the CDC etc, and FIRA, to move us back behind China by over 4 billion per year GDP. (3%). That is what bad taxes and bad investment climate will do. In 1960, Japan and Canada were almost equal in economies! True story. We still outrade them with the US. In fact Ontario outraded them with the US. I bought my first Japanese transistor radio in 1962. The Japanese are now the number 2 economy in the world. We are number 10. In 48 years. What did we do wrong and they do right? Well with the japanese it wasn't by emphasizing service economy and social enterprise. It was by R and D, marketing and aggressive engineering development. Where was Canada with the massive advantage of being next to the largest economy in the world and a duty free border? Sleeping, with a greedy government with tis hands in our pockets letting our firms become monopolies with Ottawa largesse. Highest business expenses in the world. Highest communication and travel costs in the world. And for a while, the highest taxes of any nation (factoring the myriad hidden taxes, fees etc) and the fewest deductions save Sweden. Cheapest fuel for a while. The only thing that kept us alive considering our climate. So Quebec lays off the corporate and lays a bit more on the mining tax. This is a much different regime from other countries, which have usually very low royalties, such as 0.5% to 3% on metals, and high corporate taxes, up to 50% or more. Some developing countries have it right at 25% tax such as Peru, but Chile hired a socialist in MBA clothing and he sold the greedy government on a higher tax for Chilean miners, almost 35% and a greater royalty -- as "more fair". This will put quite a few marginal copper miners under sans doot. And there are a few nowadays. You have to add it up, what your citizens do, and what is more important, a few more dollars in government coffers or people with good jobs, good outlook and more foreign exchange. EC<:-}