doctor slime, talking about shipping ore again
funny how last time the adl deal went south, doc and MG were doing the math and calculating the tonnage shipped with the ldm carrot play. Any coincidence that doc is doing it again, or shall we just say history is repeating itself with the ADL? Also of note is how much importance they have put on the nuoco deal that was gifted to medinah. Too good to be true? With medinah, it's always too good to be true, all talk, and no delivery
from doctor slime himself :
"Factoring in Medinah's deal with Nuoco copper (20% FCI and 20% "ownership") and CMLDMC gold (30% FCI and 20% "ownership") in order of importance of upcoming news I would rank these factors in this order:
1) Average shipped gold grades at CMLDMC.
2) Average shipped copper grades at Nuoco.
3) Tonnage shipped per day at CMLDMC.
4) Tonnage shipped per day at Nuoco.
5) Mill recovery rate for the gold.
6) Mill recovery rate for the copper.
DOING THE MATH
At $1,308 gold per ounce each 1 gram per tonne gold contributes $42 per tonne. The average porphyry gold grade of 0.38 gpt would be worth $15.96 per tonne. At $3.07 per pound Cu each tonne of 1% Cu would be worth $67.54. The average porphyry Cu grade of 0.44% would be worth 29.71 per tonne. Let's assume the silver and Au or Cu byproduct credits cancel out less than 100% recovery and any penalties incurred. Don't forget the average porphyry grades as being "four tenths" measured in percentage points for Cu and gpt for gold.
Industry norm is to refer to the value per tonne of ore as "ROCK". $50 "ROCK" ($/tonne) would be equivalent to about 1.2 gpt gold and/or .8% copper with today's prices. Another reason grades are so critical is that milling fees (treatment charges and refining charges or TC/RCs) are usually based on per tonne processed. With higher grade ore less tonnage needs to be processed to equate to $"X" earned. With Medinah's FCI for gold being 50% higher (30% vs 20%) than that for copper then special attention needs to be directed towards gold grades, gold cash flows and gold mine life, etc. When comparing let's say $50 or $100 "ROCK" for Medinah versus some other miner don't forget that Medinah doesn't pay any costs while other miners with a "working interest" do. Also don't forget that Medinah gets their 30% up front as it were and then another 20% of what's left over after the bills are paid. This might equate to somewhere around a 33% FCI.
