$320.00 per ounce to produce gold ?

edmundfitzgerald

TORONTO, April 13 (Reuters) - Osisko Mining (OSK.TO: Quote) said on Wednesday it has has produced the first gold bar from its flagship Canadian Malartic mine in Quebec.

The Montreal-based company said commissioning of the project has progressed smoothly and the mine is well on track to achieve commercial production by the end of May.

Malartic is expected to produce more than 600,000 ounces of gold annually over more than 12 years, at average operating costs of about $320 an ounce.

Osisko shares were up 1 Canadian cent at C$12.43 on Wednesday afternoon on the Toronto Stock Exchange. (Reporting by Euan Rocha; editing by Rob Wilson)

edmundfitzgerald

Could the gold and silver boom have the same results as the housing boom ? More and more mines, just like more and more houses.
US governments cutting back on deficits while more and more mines producing more and more metals. Who knows. Not predicting, just
thinking out loud.

pitboss

It is getting to cost more per ounce to produce these metals so if there is a decline in price how will they stay in business?

CaptHenway

The operating cost at this particular mine may be $320 per ounce. Every other mine in the world may be different.

Also, the operating cost only figures the day-to-day cost of digging out x tons of ore to produce y ounces of gold. It does not include the millions of dollars setting up the mine and the mill, which must then be repaid out of future production.

ksammut

<< <i>Could the gold and silver boom have the same results as the housing boom ? More and more mines, just like more and more houses.
US governments cutting back on deficits while more and more mines producing more and more metals. Who knows. Not predicting, just
thinking out loud. >>



Mining is very capital intensive while at the same time, it is very difficult to get financing. Many of the miners (especially mid-size and smaller) had to create millions of shares to raise capital before the run-up in PM prices a year ago. It really hurt their share price at the time. It will be difficult for many smaller mines to reopen as they may not have the cash to do so. They would have a better chance of selling to one of the mid-size or major miners. But before that would happen, they would have to show a lot of proven reserves to any bidder.

Between permits, government regulations, and everything it takes from an equipment standpoint (purchasing and building), you are looking at a good deal of time going by. The miner would have to have a very strong belief that PM prices will continue to go up for years to come.

TheBigB

<< <i>Could the gold and silver boom have the same results as the housing boom ? More and more mines, just like more and more houses.
US governments cutting back on deficits while more and more mines producing more and more metals. Who knows. Not predicting, just
thinking out loud. >>



Try starting a gold or better yet a uranium mine in the US and find out how long it takes even if you can get permitted.

This is not like the Glory Hole show on TV.

Here is a project in Alaska you might want to invest in: Pebble Mine

roadrunner

$320 per ounce could be several things:

1. Cash "cost" (does not include all costs, but basically operational ones)
2. Byproduct cost
3. Total cost - all in (all expenses included)

That said. It's probably #1. Individual gold mine cash costs by the major gold miners are typically in the $300-$1000 range. On average the best companies are keeping their
costs in the $400's, but there are majors that are now up in the $600's to $800's. Costs have been going up along with the pog. If one factors in the by-product gains of copper,
silver, lead, etc. then you might see net/by-products costs per ounce listed as low as -$100 to +$200/oz.

If one figures the all-in costs for mining which includes currency fluctuations, derivatives, admininstration, royalties, debt servicing, one time hits, etc,.......it's probably around $900/oz average.

roadrunner

AUandAG

Tens of millions to set a mine operation up, what with the capital equipment and
fees and road building and site improvements. These folks are hoping and that's
with a capital H, to make a profit at the end of the day.
RR is closer to correct at $900 per oz. Perhaps he's even a bit low.

bob