Australia's largest stock trading and investment forum Australia's #1 stock forum

Open Pit Gold Mine Depth, page-7

First 7 Last

Share
Profile

Follow
Aedo

370 Posts.

10/09/18

11:06

Post #: 35492051
Share

Originally posted by jezzathegeo ↑

Grade is king. But the queen holds the power in the kingdom and that's capital. A mine must repay capital from its margins and the primary driver behind margins is grade and metallurgical recovery of that grade. Applying a risk-weighted discount rate of in excess of 12% (yep, you read that right - mining's a risky business: what's the gold price and $AU:$US gunna be next year? How good's the geo's Mineral Resource estimate?) means that capital should be repaid within at most, five years for most operations.

Operating costs are not really relevant, because they're pretty uniform across any mine, but increase with depth. Energy's the biggest cost and is mostly driven by the mine gate cost of diesel and electricity. Incidentally, low local labour costs usually mean an expensive mine because the labour is unskilled.

KCGM and Bingham Canyon paid off their establishment capital years ago, so don't face that problem.

Most bog-standard Australian gold mines are relatively narrow fault-hosted orebodies and extend to about 120m depth, before the effects of strip ratio (ie energy cost to shift a lot of waste) makes things uneconomic.

Expand

Excellent synopsis - especially from a geo!!!! _{(says the mining engineer who struggles to differentiate one rock from the next)}
Upvote

Reply

Top Stories

I88

Infini Resources onto Phase 2 at Portland Creek after spotting 'widespread uranium'

THL

Tourism Holdings says Liberation Day tariffs smashed US RV demand

Listen: HotCopper Wire Podcast 016 – FY25 ended up not so bad... but Trump unpause is coming

NMG

New Murchison Gold blasts off at Crown Prince as 'better than expected' results return

DMP

Is Domino's a steal after -25% plunge?

KGD

Kula picks up unexplored niobium play in Malawi, with surface samples logged

Week 27 Wrap: 40% China tariffs?; ASX +10% FY25; US Amazon price spike

OSL

OncoSil wraps up recruitment for key pancreatic cancer trial

Trump chides Powell as Goldman call for calm. The RBA must be nervous

HotCopper Highlights, Week 27: G8 scalped, Domino’s drops the box, Gemlife brief hype & more

First 7 Last

SPONSORED BY