Mal, from an accountants perspective, the cost per ounce is easier as its convenient to compare to gold price per ounce. But your average mine manager will prefer to use cost per tonne for the reasons another poster mentioned above.
What I was referring to was a standard NPV analysis where the grade (xxoz/t) and other variables such as mining costs, processing costs, and gold price are entered. The mining costs are usually calculated separately (in $/tonne) and then converted to $/oz to assist with a true comparison with current market rates for the commodity. And in this context, there are very few mines operating at anywhere less than $600/oz in Australia.
This is obviously reflective of the grades commonly encountered in u/g mines, with 6g/t being on the low end and 15g/t being high (head grade that is). I'd say anything above 15g/t at Woods Point would be considered bonanza grades these days (remember, no hand picking as the old timers did).
So to cut a long story short, you're right, grade does enter the equation - apologies there. And in costs per tonne for small scale producers (under 250ktpa) youre looking at from $200/t to $425/t.
Again, referring to "dogs" original comment that "MCO is likely to be the lowest price gold producer in Australia at under $300 an ounce", I cant see any evidence to back up this (significant) claim. I understand that some nice grades have been encountered on drill intercepts, however these arent head grades - and that makes a big difference.
MCO Price at posting:
37.0¢ Sentiment: None Disclosure: Not Held
