Gold AISC comparison

Came across an article today in The Australian talking about Saracen (SAR) which seemed to be relevant to the likelihood of CRB having any trouble getting  the plant up and running given early costing indications. The projects seem to have enough similarities for comparison, yet starkly different AISC.

If you compare the estimated $80M capex, US$400/oz AISC (de-risked through established pyrite buyer) and the 70,000 oz/yr of CRB to an article in the Australian today, it would appear at a high level to be a project which should attract capital readily

even the acquisition cost of $23M for the mine last year compares very favourably to current market cap, let alone the superior cash flows which should by then command a multiple of that

thoughts on this being a valid comparison? (highlights of article below)


The Thunderbox goldmine in Western Australia is to be brought back to life in a $65 million redevelopment by ASXlisted Saracen.

Thunderbox, 45km south of Leinster, produced 805,000 ounces of gold before its closure in September 2007 by the previous owner

Saracen acquired the operation in May last year for $23m (and royalty payments capped at $17m)

Results from the study, released yesterday, covers an initial 4-year mine life during which more than 590,000 ounces of gold is expected to be produced at an all-in sustaining cost of $1032 an ounce.

the fall in the dollar is currently serving up a local price of $1514 an ounce.

Free cashflow over the initial mine life is forecast at $195m (assuming $1500 an ounce).