"According to Gary our mining costs are somewhere between $3 and $5 per lb. Split it and say $4 and run the numbers and you'll have a pretty fair idea of our revenues [unless I made a mistake along the way!]"

Do we know if this is cost to get the ore to the surface or if this is the cost to run it through our mill? I am assuming it is fully milled cost.

Taking $13/lb x 0.77 = $10/lb for the nickel in our ore. Subtract from that $3-5/lb for mining costs and $1-2/lb for depletion costs and that nets us around $3-6/lb for each pound of nickel we mine. At a 2% ore grade at 90% extraction, that gives us $120-$240/tonne of ore.

To offset $1 million in mill amortization and $1 million in general/admin costs per quarter, we need to extract $2 million / $120-$240 = 8,300 to 16,600 tonnes of ore to break even.

16,600 tonnes of ore / 90 days = 185 tonnes/day, which implies that we should about break even at 200mt/d... and this is great news since we are working our way up to 1,500mt/d in the coming months.

If the $3-$5 cost does not include milling, then this equation changes accordingly. And likewise, if nickel prices drop, the formula changes... but at $10/lb nickel, we should still be able to generate a small profit. Below that and we probably won't.