RE: The 'value valley'...8 Dec 2020 12:37
An Example from Today
I think it would be useful to have a look at one of the world’s lowest grade copper mines operating today.
For the 2011 year Boliden’s Aitik mine milled 31.5 million tonnes at a head grade of 0.24% copper, 0.16g/t gold and 2.0g/t silver. At the end of 2011 it had reserves of 710 million tonnes at a grade of .25% copper, .13g/t gold and 1.6g/t silver. Resources totalled 1.7 billion tonnes at 0.18% copper, 0.11g/t gold and 1.0g/t silver.
Aitik is located within the Arctic Circle in Sweden, where temperatures reach -45o C in winter. The reason the mine is profitable at such low grades is that it is one of the most efficient mines in the world. The mine features in-pit crushing, underground and overland conveyers, two gigantic 22.5MW gearless mill drives, etc. It is highly automated and the entire system can be run on HTC smartphones.
Final Word
The point is that “low grade” depends upon where you stand in time. Once 2% was rubbish, now the time approaches when 0.2% will be gangbusters.
In sum – go for porphyry, go for big.