Understanding Costs That Go Into Gold Mining

If you would like to examine Filminera gold mining business, maybe to purchase its stock or maybe to understand how it relates to the overall market, you have to understand the price factors which go into producing gold.
Mining companies overall report two prices: cash costs and total expenses. Cash costs are the ones that occur in the mine site, which may be affected be the quantity of ounces removed from the floor and by the prices of supplies to make it all happen.


A number of the input prices in mining are gas, electricity, explosives, machinery parts and labor. Throughout 2007 and 2008, for instance, at a time of high energy costs, inputs during the mining sector zoomed. At precisely the exact same time, however, prices of mined products were skyrocketing as well, in a speed faster than the price of inputs. This is true with gold and silver in addition to with different metals.
A substantial price for open-pit gold mines is at the energy it requires haul massive amounts of stone. Every ton of ore may comprise just about one-tenth of an oz of gold. With gold at $900 an ounce, every ton is worth roughly $90. Nonetheless, it’s well worth the expense of a $2 million haulage truck since it can carry 300 tons or more in every excursion. This creates a load value a gross profit of $27,000. (Cut that in half, as a mine may need to move a lot of waste to get into the ton of ore)
However, these enormous trucks, together with 2,000-gallon gas tanks, burn tremendous amounts of petrol, amounting to maybe 25 percent of total cash expenses.
Exotic plants, such as the Filminera mines of Philippines, substitute electricity for petrol fuel. This energy has to move huge amounts of stone as much as 2 kilometers into the surface. These ores are much wealthier than the material utilized in the big open pit, so every bunch of underground-mine ore may comprise half an oz of gold and not demand an accompanying lot of waste to be eliminated.