"Exploration, development and sustaining capital costs have gone through the roof, resulting in a number of gold deposits being put back on the "maybe someday" shelf and out of the economic reserve category. Recent examples include Barrick Gold's decision to hold off on the development of 19 million ounces (Moz) at Donlin Creek and 17 Moz at Cerro Casale because they "do not meet investment criteria." Just this month, Gold Fields also pulled plans for open pit development of its 7.5-Moz Chucapaca deposit due to high capital costs. Even smaller deposits like Richmont's ~2.5 Moz (Measured Indicated and Inferred) Wasamac gold deposit has been pulled because "it generated a less than adequate return" following the results of a number of optimization studies. I suspect there are many more large- and small-scale projects to be pulled; companies want to avoid the dilemma Barrick faces at Pascua Llama--an initial $3.5 billon ($3.5B) capex estimate is now over $8B, with no turning back." ______________
19m oz and 17m oz projects canned due to capex/opex/rri/roi- whatever it was- probably all of them. Clearly, bigger is not always better. GRY has a very good amount of gold, with an update coming (hopefully an upgrade). I am gonna guess they do an upgrade to 4.8m oz @ 1 cut-off. They just need to ensure this project meets "investment criteria".
GRY Price at posting:
54.0¢ Sentiment: None Disclosure: Not Held
