Given the following core drilling information, metal prices and a tonnage factor of 0.45 m 3 /tonne
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Given the following core drilling information, metal prices and a tonnage factor of 0.45 m3/tonne for the Tolbert mineralized zone: (25 points)
- Calculate, the ore reserve characteristics using the triangular method.
- Calculate, the expected mine life and daily capacity of the ore deposit based on 260 operating days per year using Taylor’s equations. Disregard dilution and recovery factors.
- Based on the results you calculated in a) and b) above, a capital cost of $5,000,000 , an expected total mining cost of $110/ tonne, an expected milling cost of $30/ tonne, an expected mill recovery of 90 percent for each of the valuable metals, shipping costs for the Zn and Cu concentrates (2 different concentrates) to the nearest smelter/refinery of $30/ tonne (for each of the concentrates), smelter recovery of 92% for the Zn and Cu concentrates, treatment costs for each of the concentrates of $65 /tonne, a penalty for impurities in each of the concentrates of $25/ tonne, a grade of 38% for the copper concentrate, a grade of 42% for the Zn concentrate and an overall tax rate of 46%, calculate the maximum investments allowable for the project which would result in a minimum required rate of return of 15% and 20% for the Company. Ignore all other costs such as depletion allowance and depreciation costs. Show all calculations. Discuss your results.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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