I would estimate the way we are saving money, 12 cents an ounce would be more like it. Let's face it, if you don't mine, the gold is really cheap. When we get really would up and start splurging on serious stuff like drills, fans, piping, pumps, timber, alimaks, exorbitant salaries, etc... we should be able to hold costs down to a dull roar still. It all depends on how cheap we can do it. Engineering gold is pinching pennies until the scream, and then putting them through the roller to see how far they will flatten out. Hemlo mines gold ore for 60 dollars a ton, but I figure they are high overhead. I think eventually we can do it for less. To start I believe it will cost us 80 dollars per ton CDN all up to get ore out of the ground and to the mill. Milling at first will cost us a fixed 40 dollars per ton. Eventually we will be able to bring that down to about 15 dollars per ton in a couple of years. But even at 120 dollars per ton, we are aiming at 360 dollars CDN per ounce. That is still 176 dollars an ounce profit. Today CDN gold mines work at from 5 tons per man day to even 10 tons per man day. At the old Louanna Mine in 1980 we used to mine and mill 300 tons per day with a complete staff of between 30 and 60 men. And we were doing shrinkage stoping the old hard way. With a more automated approach, we could do better than that, and certainly no worse. Even at 5 tons per man day, The labour/support component is no worse than 200 CDN dollars per ounce here. If mining were 60 dollars/short ton for dynamite, bits, pumping, tramming, hoisting, timber, rock bolts, and support equipment on top of that, then we are looking at $380 CDN/ounce. That assumes a grade of .33 ounces per ton, something we believe is achievable.
In these kind of situations we won't know until we do it. Historical costs in many similar operations of this scale throughout Canada support doing it at those kind of figures.
EC<:-}
