Hi Heeman. There are a number of factors that impact the Opex costing models. Besides the level of feed grade there are fixed and variable costings that effect the cost per ton depending on volume.
So, without going into the financial and accounting models used in detail the two main factors causing the disparity are:
1. Difference in level of TGC% feed grade between the 2 companies. KNL has to process twice as much ore to produce the equivalent tonnage of ROM concentrate.
2. Difference in tonnage volume proposed to be processed between the 2 companies impacts the cost accounting result due mainly to the ability to spread fixed costs across more tonnes of ROM concentrate.
I hope this helps.
Cheers
Hi Heeman. There are a number of factors that impact the Opex...
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