RE: Thinking on numbers6 Dec 2019 12:47
K3VMC - I've already covered this in a previous post which I've pasted below.
"The trolls and doomsters amongst us have been suggesting that the oft quoted opex figure of $94/mtu is either not achievable or that the market requires proof that it can be achieved.
Total opex of $94 includes a tin credit of $16, a contingency of $12 and a royalty of $4.
If you remove those 3 elements for the purpose of a cost analysis, you are still left with $94/mtu opex.
We know from the FID that this consists of
1. $23 mining.
2. $13 drill & blast.
3. $5 grade control.
4. $18 crushing and screening.
5. $14 pre-concentration jigging.
6. $7 concentrating.
7. $6 waste haulage.
8. $4 laboratory.
9. $5 management & admin.
1. The mining cost is the largest single expense. We know from the 7 June RNS, that the contract awarded to GME was in line with the FID.
2. There's no data that I'm aware of to suggest that drill and blasting has been contracted out, so I'm assuming it's done by in-house personnel. A drill & blast program will be in place and the costs of this (hourly labour, materials) are unlikely to deviate much from the planned nominal. Hourly paid overtime is likely to add to costs here.
3. Grade control could be more variable but is a minor cost, but again this will be an in-house mainly labour expense. Hourly paid overtime if necessary is likely to add to costs here.
4. Crushing and screening cost will be mainly labour and power consumption with small deviations from nominal.
5. Pre-concentration jigging cost will be mainly labour and power consumption with small deviations from nominal.
6. Concentrating cost will be mainly labour and power consumption with small deviations from nominal.
7. Waste haulage costs - could be contracted out at fixed cost. If it's in-house, then labour, equipment leasing and fuel will be the costs. Either way, maintainance costs will not be required.
8. Lab costs. Fixed labour cost.
9. Management & admin. Fixed salary and labour cost.
I don't see any major deviations in the above costings.
The most significant influence on opex is going to be achieving a consistant output of 200 tonnes per month through the whole process. We know that the jig, mill and crusher are working at or near to design capacity.
Over the next few months we should receive reports on how the concentrator is performing.
Given that we know all of the equipment is state of the art and has been chosen or designed specifically for La Parrilla by world class engineers, then confidence in the process should be high.
Comparisons with Wolf are not relevent given the different metallurgy and engineering "expertise" deployed.
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