randgold and grades - implications

so - we have "division" about the way Kevin is conducting the current drill program and a fair number of posters wanting to see "bonanza" drill results

Aptayl posted a fair bit on what RG is processing atm and think we need to go back to that so we can put that into perspective with what some of us think Kevin's objectives are:

Read the RG reports - all on record - so you know what sort of grades they have been processing (and still making good money on)

1st, 2nd and 3rd quarters for 2013 were prodominatley processing stockpiled ore, they were processing head grades around .35 to .45 g/t - there was no mining in the costs because it was stockpile ore

4th quarter 2013 first pushback ore through head grades around 1.3 to 1.4 g/t with operating costs around us$750 to 800 oz.

First quarter 2014 once again getting about 1.3 to 1.4 g/t with operating cost around us$800 oz.
(operating cost is quite high because of the work envolved with the pushback)

When they start processing tailing (not yet) RG are only going to get about .4 to .5 g/t


From this - the message I take away is that grades around 2gpt (higher grade due to cost -haulage compared to the sub 1.5 RG did process) or higher in multiple zones (all adding up to reasonable supply for a few years) is all that may be required to really get RG interested in a JV/toll treatment/supply.

I doubt RG would settle for processing tailings (0.4-0.5 gpt) when BGS may be able to supply 3-5 times that grade to feed the mill for several years to come (and possible prove up more during that period)

The other implication is the way the Mali government is invested into this (part ownership/royalties and employment) - which I tend to read that the government has a vested interest to keep the mine operational.

Think a lot of us gold bugs invested in Australian assets are not familiar enough with the different scale of "economics" in Africa and what would be less than marginal here is profitable over there (as long as it is shallow etc etc).

Feel free to shoot me down.