Crystallex International Corp fka KRY

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The Move To $1650 And What It Means For Producers
Posted: Jun 18 2010 By: Jim Sinclair Post Edited: June 18, 2010 at 2:27 pm

Filed under: General Editorial

Dear CIGAs,

It is my feeling that gold is headed on this move to $1650 with its normal drama.

Let’s think about what this means to gold producers.

With gold valued at $1650 per ounce:

- 500,000 ounces = $825,000,000 less the cost of mining.
- 1,000,000 ounces = 1,650,000,000 less the cost of mining.
- 2,000,000 ounces = 3,300,000,000 less the cost of mining.

Costs:

- Underground average costs are approximately $500-$600 (assuming no derivatives or derivatives covered as international and Canadian GAAP requires derivative losses be expensed to the specific property).
- Open cut average costs are approximately $300 (again, assuming no derivatives or derivatives covered).
- On surface average costs are approximately $22-$75 (again, assuming no derivatives or derivatives covered).