General Discussion Topics, page-2424

I have always wondered about those figures and the methodology. For example, is the $90 "in ground price" based on a percentage of the gold price or profit margin. If it's based on the gold price and the gold price doubles then the $90 should also double, but to me it's not logical to base it on the gold price, because after the breakeven point, every dollar increase in price goes straight to the bottom line and so worth exponentially more as the gold price rises.

Let's say at US$1,100 the profit margin is US$200 and they calculate an "in-ground price' of US$90, then if the price doubles and costs stay roughly the same, then the profit might become say US$1,300, an increase of 6.5x. In theory then the price in ground should be factored up by 6.5x or thereabouts. I know it doesn't seem to work that way, but it sort of makes more sense to me.

The bottom line is that quality gold in ground is very profitable at a gold price of AU$2,600.