@ Jenkstar, the calculation depends on many inputs. Firstly you...

@ Jenkstar, the calculation depends on many inputs. Firstly you need to calculate the amount of concentrate produced using the metallurgical testwork results. I assumed Alta Zinc will use ore sorting underground as the testwork shows excellent recoveries in the mid nineties for rejection of 55% to waste. I had to estimate the proportion of fines generated by mining and crushing as this fraction cannot be sorted. I used 20%. This means 80% of the mined material can be sorted resulting in 56.4% of the mined material needing treatment in the flotation plant. Mining 0.5 Mt per annum would generate 8,390 tonne Pb-concentrate and 50,020 tonne Zn-concentrate.
Now one needs to calculate what each tonne of concentrate is worth. Using standard payability terms I get 95% of lead paid, 91% of Ag paid for and 85% of Zn. I used US$125/t conc. as treatment charge, which is high in the current environment, but I used it to reflect long term conditions. For transport, harbour charges and shipping I used a low US$80/t dry concentrate, which is low, but reflects the short distances to potential offtakers. Using metal prices of US$1.33/lb Zn and US$0.98/lb Pb and US$27/oz Ag the value at mine gate of the Pb concentrate would be US$,1776/t and for Zn-concentrate US$1,373/t. Annual revenue would be close to US$70 million, or US$296/t milled.
For the cost of production I assumed US$40/t, for ore sorting + haulage + milling and flotation and drying US$30/t. General and Admin of US$10 million per annum was assumed. This gives a total cash cost of US$38.5 million, or US$137/t milled.

When you double the mining rate there should be added benefit from economies of scale and result not only in double the revenue, but a slightly better cash margin.

I trust it is now clear.