I like this bit, Many mining projects have both low-grade and high-grade zones. When prices fall, a company can mine the richer ore and still make money. It may sound shortsighted, but it can be the right thing to do to stay profitable and be able to survive in a temporarily weak price environment.
But high-grading, as it's called, can make low-grade ore part of a disappearing act. Here's how:
When metals prices are low and companies focus on high-grade ore, the low-grade material is temporarily bypassed. It's still physically there, so one might assume the company will come back at a later time to mine it. But not only is it not economic at lower metals prices, it may never get mined at all.
That's because some low-grade ore only "works" when it's mixed with high-grade ore. Even when gold moves back up, it doesn't matter, because the high-grade ore is gone. So it's not just gone legally, as per regulatory definitions of mining reserves—it may be economically gone for good.
Miners could return to some of these zones in a very high gold price environment (something well north of $2,000), but that's a concern for another day. The point for now is that many of today's low-grade zones would be written off if the high-grade they need to work is gone.
Any dates for actually mining the stuff at deli Jovan. In since mvc days and talk was that mining at deli jovan would be in the near term - Any dates quoted ?? Or are they concentrating on getting resource estimate ???
Ed Slowey, Chief Executive of Orogen, commented: "The assay results from the Gindusa West shallow drilling programme in Serbia confirm that the high grade gold-bearing veins located by trenching at surface can be traced to depth. The assay results will be analysed over the coming weeks to determine the continuity and shallow resource potential of the system at Gindusa West as well as the deeper potential in the vicinity of the old Gindusa mine.
Did ORE not have to spend another C$2M by the end of December 2013 to achieve the 75% earn in with Reservoir CapitaI for the Deli Jovan project? I would have thought an RNS would be issued to confirm or have I missed this.
@bing9482 Orogen's sp is NOT "heavily reliant on the price of gold", though you are not the only one here to think that.
Suppose the current value of the gold in the ground that Orogen owns for itself is, say, £120m and the total net cost of digging it up and extracting the yellow stuff is £60m, then the c£6m present value of the company means that the current sp is only 10% of its net gold worth. Now, suppose the gold price drops by even as much as 20% tomorrow, that would mean that Orogen's net gold worth would still be 8 times its current price and should therefore have little effect on the sp at its current. Only when the sp truly reflects Orogen's net saleable reserves will the change in the price of gold be a major factor in the change in the company's sp. Of course this is based on fundamentals, rather than on investor psychology.
ofcourse price is dependent on supply and demand the large demand is created by those that hold gold as bond... i understand that many of the developed nations have reduced holding gold as bond... while other nations such as china and india have increased it significantly... There is also some analysts advising investors to hold gold and it happens alot with economic uncertainties... not sure which way it's gonna go yet... having said that there will always be some demand of gold and therefore it is best to check the cost of production IMO those that produce cheaper will always prosper... dyor GL and Happy new year
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