Prom Resources Inc (PRMO)

[jts130]

FWIW...

"When investors do their homework and perform their due diligence in choosing companies in which to invest, they will find one miner can be vastly different from another. Some companies are able to produce an ounce of gold for cash costs of under $100 an ounce, and some are spending an average of over $400 an ounce to produce an ounce of gold. There are several reasons why there may be such a difference from one miner to another, but when it comes down to it the company that produces gold for cheaper has greater profit potential which in most cases reflects positively on its stock price.


As mentioned, many other factors go into and can increase the cash costs of producing an ounce of gold for these miners. Factors such as changes in production rate, changes in ore grade which can lead to changes in milling/processing costs, maintenance costs, labor costs, development costs, currency fluctuations, royalties and production taxes are sometimes included, refining costs, selling costs, transportation costs, inventory adjustments as well as many other costs form this equation. The management of each of these costs has the capability of increasing or decreasing overall costs.


In addition to all the various expenses that influence total cash costs, there are also mechanisms capable of directly decreasing overall cash costs. Most gold mines produce byproducts, for example silver. Instead of selling and booking the byproduct exclusive of gold, it can be lumped in with gold so its profits can act as a credit to the operating cash cost of gold. Changes in byproduct production can also influence overall cash costs."

http://www.zealllc.com/2005/gmprof.htm