This letter was attributed to Dave Webb. It explains how Tyhee can make money on 0.3 gpt ore:

"One is interested in a combination of grade and width, because it is only then one can add ounces. In the past mining companies were completely engrossed with grade, until some of the bulk mining methods showed it was possible to move massive quantities of rock for less than $1 per tonne. Heap leach operations showed it was possible to recover some gold from the right kind of rocks at very low costs. The low costs made the poor recoveries typical of this technique acceptable. Processing the rock by crushing, grinding, and using other techniques common for gold add a few more dollars with each procedure, but the rate of recovery increases dramatically.

For example, many bulk mineable heap leach operations operate with rock grading between 0.5 gpt and 0.75 gpt gold. Recoveries are typically between 60 and 70% so only somewhere between 0.3 to 0.5 gpt of gold are recovered. This exceptionally lean type of operation makes money because mining and heap leach costs can be around $3 to $5 per tonne. With gold at $1,000 per ounce each gram is worth $32, so a revenue of $9 to $15 per tonne vs a cost of $3 to $5 leaves lots of room for profits provided the operation is big enough to cover the incidental costs plus reclamation.

For Tyhee Gold Corp we are looking at mining costs of around $2.50 per tonne (smaller operation) and processing costs of around $12.50 per tonne (crush, grind, gravity, floatation, regrind, leach, and storage of tailings). So at the low end our costs of $15 per tonne requires 0.5 gpt of recoverable gold if we assume $1,000 per ounce, or 0.29 gpt of recoverable at $1,500 gold ($48 per gram). Given our expensive recovery process gives us 92% recoveries, all we need to make money at today’s prices is about 0.3 gpt.

Now to make things interesting.

We know that we have to move waste rock to get at our ore. This waste rock also costs us about $2.50 per tonne to move. If that waste rock (say it is on top of some ore grading 3 gpt) contains enough gold to pay for the processing, then it should be processed. If not then this waste that must be moved, should go to the waste dump (to be used for road construction, dam construction, or whatever). So now you can see that this rock only has to pay back $12.50 worth of expense and not the addition of the mining costs (as it will be moved regardless to get at the ore underneath it). So you can see that we are now interested in knowing exactly how much gold is in every tonne of rock right down to 0.25 gpt or even less, if it occurs anywhere near higher grade material."

http://caps.fool.com/Blogs/compelling-pm-microcaps/599604