Ann: Fremantle Conference Presentation, page-42

Hi Plough,

Golden Grove simply tells us that the deeper an underground mine gets the more expensive it becomes to mine and process the ore. That necessitates gradually increasing the cut off grade which increases the main metal equivalent feed grade to compensate for the extra costs as the mine goes deeper.

It certainly doesn't provide any support for your argument that HGO's management don't know what they are doing and that HGO's feed grade and mining costs are too low.

The helicopter view:

Its pretty obvious that extracting big lumps of ore and trucking them to the ROM stockpile and crushing the rock with massive above ground crushers when your stope is 50m from the bottom of the open pit is going to be as cheap as underground mining can be.

It's also pretty obvious that the mining cost will increase as the stope gets further away from the ROM stock pile.

There is a point where trucking big lumps of ore from greater depths ceases to be the best way.

At this critical depth a massive shift is needed. The Crushing circuits shift from the processing operation to the underground mining operation. Getting the miners and ore in and out requires massive Cap Ex and other increases in mining cost due to the need for Personnel Lifts and Elevators and Conveyors to get the crushed ore to surface.

On a positive note:

Golden Grove does tells us that those deep deeps under The giant pit that aren't in the exploration target yet will be a big earner when the mine gets to those massive depths.

Sure we wont be mining 1% ore but will be making good profits out of 1.5% feed grade.