Replies to post #26884 on VIPR Industries Inc (fka VIPR)

[nuron]

Hi ringbellz, The company feels very positive about the gold concessions. We can only wait and see, it won't be long now before we see the MMI results. Then we will have to drill to get an accurate estimate.

[Polaris1]

It would be profitable for someone to mine, but not VIPR. The upfront costs of starting a mine are quite high. This is why most viable mines have MUCH more than 50,000 ounces. The average extraction cost over the life of the mine may be around $450 per ounce. It is not a linear cost, however. You will see that the extraction costs produce a net loss for the initial stages of the mine, while the costs gradually go down over the life of the mine until the profit margins are quite high when the resources are finally expended. I.E. Break even or lose money over the first 100,000 ounces, slight profit for the next 100,000 ounces, large profit over the next 100,000 ounces.

In other words, you need quite a few ounces to make the gathering of equipment and organization of facilities worthwhile. VIPR doesn't have these in place and so mining a concession that small only makes sense for a company who does. This isn't to say VIPR wouldn't profit off a concession with 50,000, they could obviously sell it to someone who could.