Crunching the numbers

One of the emails I had from Ashley, he said the following Average industry margin is $350-$450 per ounce margin for toll treatment. Upside is in treating high grade material as you typically only pay 86% recovery so the plant operator keeps 5-10% of the gold content also.

Ann on the 3rd of Sep

As at the end of August, three contracts have been signed with local mine operators for the toll treating

of third party ore. These contracts run for 12 months and delivery of ore under these contracts has

commenced. The commitments received equate to approximately 22% of our plant capacity and are

for:

a) 300 tonnes per month (TPM) at a grade of between 45-90 g/t Au  300 *45, 90 gr = 482, 964 oz MIZ gets 48, 96 oz

b) 200 TPM at a grade of between 30-45g/t Au    200* 30, 45 gr = 214, 321 oz MIZ gets 21, 32 oz

c) 150-200 TPM at a grade of 17-25 g/t Au from oxide material   150* 17, 25 gr = 91, 133 oz MIZ gets 9, 13 oz

MIZ will make $260,000 a month in tolls plus up to 140 free ounces * $1250 = $176,000
$260,000 plus up to $176,000 a month plus $180,000 MIZ recevies for leasing out their copper plant  =  $616,000

On top of this MIZ will produce 2700 ounces a month at a cost off $700 an oz profit 550 * 2700    = $1,485,000
  Total $2.1 MILL a month
These figures  are based on about 125 TPD capacity


On top of this MIZ will ramp up production by the end of the year to 250 TPD, early next year they will be applying to extent their permit capacity to 350 TPD. In a few months time the $2.1 MILL figure could be over $ 6 MILL a month.

Analyst arrowhead, who has a MC of $837 MILL has given MIZ a price target of 2c/ 4c, this also bodes well with what MIZ has stated in on of their last ann, that being MIZ is capped at less than 20 % of its peers listed on the TSX.