economics 101 scratch calculation, page-2

Jumpstart,

Great post to start the week off and interesting to see the negatories up early as my TU was offset by a downer.

The only alteration I would suggest to your model is a re-look at the mining costs :-

Strip ratios - On day one if the ore extends to surface the strip ratio is 0:1 ie no overburden to waste.To weight the cashflow appropriately I suggest using a 1:1 strip ratio Year 1 to a 5:1 strip ratio Year 10.

Mining costs - The $3.40/tonne is an average over 10 years. Again on day one, the cycle times will mean a cost of under $1/tonne is likely whereas at year 10, at full pit depth, the cost could be $5/tonne.

Returns in early years are therefore likely to be significantly better than suggested although the distribution of grade over depth will ultimately govern the outcome.

Bring on the BFS !

Cheers - Surfydad