Allana Potash fka AAA

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Break Even Stripping Ratio (BESR) Estimate

It appears there is a calculation that helps determine the breakeven point beyond which the cost to remove overburden becomes prohibitive. This calculation is used to derive the Break Even Stripping Ratio (BESR)

http://www.oraee.net/shenase/Portals/0/ascertaining.pdf

The BESR is calculated for the point at which break-even occurs and the necessary stripping is paid for by the net value of the ore removed. Generally, the BESR can be determined as follows:

BESR = I - CT / CW

I = Revenue/tonne of ore
CT = production cost per tonne of ore (incl. all costs to the point of sale, excluding stripping)
CW = stripping cost per tonne of waste

For example, if we assume

$400 / tonne finished KCL
$100 / tonne processing, shipping, taxes, bribes, etc
$1 / tonne to remove material

and apply it to DK-10-11 Zone 1 (3.3M @ 33%)

I = $133 (.33 X $400)
CT = $33 (.33 X 100)
CW = $1

BESR = 133-33/1 = 100

IE: Using these numbers, we can remove 100M of overburden to get at 3.3 M of ore @ 33% grade and still "break even"