Is a 0.5% cut off valid for an open pit ?
Lets say Cu is forecasted at $A12,000 a tonne then 0.5% of that is $60.00 a tonne ore value
Au is around A3000 an oz ie about $96 a gram so 0.5% Cu would be similar as 0.6 grams a tonne Au
So how can you use a 0.5% cut off grade as there would be very few open pit gold miners able to break even at 0.5 gram a tonne gold (CMM being an exception but they have Clark running the show )
check that cut off against DVP's Sulphur sring project that has a processing cost of $60 a tonne or the same value as CNBs cut of grade ore , and there is still the cost of mining the ore
It also brings into question how viable a 1.6 % Cu grade is economic given The process route for a Cu/Au con is inherently higher capex ( flotation then smelting ) and lower in total recoveries than a simple Au CIL process route ,a nd if a higher cut off grade is used then that diminishes the resource tonnage and thus economies of scale .
On the flip side shellower pits say to 120 meters deep than what they forecast (22o meters) would reduce strip ratios and reduce mining costs considerably , guessing 70% drop in mining costs , but similar process costs per tonne , the DVP sulphur springs project has a process cost of around $60.00 a tonne
CNB Price at posting:
68.5¢ Sentiment: Hold Disclosure: Held
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