I asked a friend who carts for a mine near Kalgoorlie what would...

I asked a friend who carts for a mine near Kalgoorlie what would be the average cost to truck ore and he said about 9c per tonne per km.

So a 110km trip would cost about $10 per tonne of ore. If the Melville mine was to produce at 1.6gpt as expected that's about $120 of gold per ounce of ore using a gold price of $2350 poz.

If taking the cost of cartage from the 1.6gpt, it would be the same as mining around 1.45gpt, which is still much better than .08gpt than Dalgaranga is currently operating at.

If .7gpt is say the break even point of the current operation, GCY would be making a return of .1gpt profit, or $7.50 per tonne of ore through the plant. Multiply this by the 2.5mtpa rate of the plant and you get $18.75m profit pa.

Run the equivalent of 1.45gpt through the plant and they will make .75gpt, or $56.25 per tonne of ore. Multiply by the plant capacity of 2.5mtpa and you get $140.625m profit pa.

Whilst the above example may be simplistic, it shows the power of grade and puts into perspective the trucking costs. Sure it has an impact, but a half decent grade will more than compensate for cartage.

This is why I believe WGX has missed a trick here. They could've quite easily have taken out FFR also and just ran their higher grade reserves through the plant and in less than 2 years recovered the cost of their initial investment and own the plant and at least 1.3moz of gold currently held by GCY and FFR.