posted on
Jan 08, 2013 07:39AM
Cash costs net by-products for polymetallic deposits can be misleading especially if the distribution of the primary metal is low.
Just imagine you have two exactly the same mines with the same CuEq grade. One is 100% Cu and the other is 50% Cu and 50% Au. It is easy to see how the first mine has higher Cu cash costs net by-product credits even though both mines produce the same operating cash flow.
Approximately 60% of SC revenue comes from Cu versus 40% at Casino creating this distorted negative cash cost. Casino's lower strip and lower processing costs also contributes to the difference in cash costs but who cares since your not comparing apples to apples.