are people really aware?, page-47

morning,

"This is because the costs of operating a marginal gold mine will rise as a deposit that is not economic to mine at one price will become economic to mine at a higher price.

Do you get it?"


Nope, don't get it.

1. fml being marginal - opinion only. You don't get a company from 17k oz to 200k oz in 3 years without spending loads more than fml did with a marginal company. Also fml costs are smack bang in the middle of all mining companies and I think cre costs will drop dramatically toward that figure -- so if you think that fml is marginal then you must think that there are only a very few gold mining companies that aren't marginal. fml is not a high cost producer - it is a medium cost producer - and most low cost producers run risks I wouldn't run drunk on a saturday night.

2. no accounting for grades getting better (eg. the mount, apollo)

3. No accounting for costs reducing - eg. apollo and streamlining cre - also so many producing mines at coolgardie now that blending will be much easier not only now but over the next 12 months - making stead constant production grades a far easier exercise. imo fml are going to have so many piles of dirt laying around in 12 months the only problem they will have will be how the hell to get more processing going to use up the excess.

4. if the pog does anything like it did in the eighties - the mark up in price will far exceed any cost increases in operation a mining venture

So, nope, don't get it at all.

have a great day all

Pinto