GG in late 2003 was operating at break even with a cu price of mid 90c, zinc mid 40c, AUD low to mid 70c and a labour force of just over 200. Today, we have things almost back to where we were back then except gold/silver credits are higher and the workforce has grown to almost 800. From memory it was more economical to mine zinc than copper if the price ratio fell below 3 to 1. At zinc 48c that ratio is $1.44 copper so I suspect GG would make more money processing zinc at current prices. They do not have the reserves to go total cu anyway so suspect they would currently be doing 70/30 split zinc to copper but as I said at current prices they may be contemplating going totally to zinc! They need to at a minimum half the workforce pronto to be even close to profitable at current prices are my thoughts!
OZL Price at posting:
55.0¢ Sentiment: LT Buy Disclosure: Held
