You've calculated the in-ground value, but this is very different to the portion of the Resource that is recoverable and economic to mine.
The key to this is understanding that a mining Reserve (not the Resource) underpins economic assumptions. Reserves are the portion of either Measured or Indicated Resources that are economic to mine and are based on rigorous economic inputs. The conversion factor of Resources to Reserves varies, but for these types of deposits 40-60% is ballpark.
So for 140 Koz of Indicated Resource, 40-60% may eventually be eligible for conversion to a mining Reserve. Inferred Resources are not eligible for conversion to Reserve, but naturally with further drilling may be converted to Indicated classification in the future.
It's generally better to have single, cornerstone deposit and not have the Resources scattered across different satellite deposits, as this tends to increase mining costs. However, if the satellite deposits become large enough they can become good cashflow generators in their own right.
Hope this makes sense, and good luck with your investment.
GML Price at posting:
8.8¢ Sentiment: None Disclosure: Not Held
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