cash cost

The question of cash cost has come up a number of times.

There is a July 2007 Conceptual Mining Study that estimated 75c/lb for the first two years rising to 86c thereafter. But this was based on a 10 year mine life and ramping to 40 Mtpa after year 2 (refer Marengo Historical announcements).

The capital costs were also very preliminary.

On the positive side, the resource and grade has grown since then. Especially the potential to mine higher grade elements in the early years and benefit from precious metal credits. The base prices used were also conservative.

From the current estimate its interesting to look at the mines expected yearly fuel usage and what that might cost. Fuel/power is likely a major running cost and remains well under a 85c/lb budget. But given how big the operation is and the labour involved a higher cash cost might be more realistic.