MCO 0.00% 11.0¢ morning star gold n.l.

quartz mining

  1. 1,860 Posts.
    a message to MCO's true believers,

    to get ahead of the curve in gold mining it must be realised that most of the Western Australian gold miners are verging on what I call marginal operations, working with low grade sulphides and high CIP/CIL processing costs. The most recent proof being St Barbara (SBM) which had a loss for the quarter. Marginal operations usually require some financial engineering to survive and hence the need for hedging and gold put option policies, which are usually highly destructive. And then there is the need for high capital expenditures for CIL/CIP plants. Saracen (SAR) from memory values its CIL/CIP plant at $150 million, just to give some indication of the costs of them. Whereas the quartz miners have minimal processing plant requirements, no need for huge borrowings, no interest payments, very low plant depreciation costs, no hedging requirements, high grade ores, low maintenance (the cost of maintenance alone on a CIP/CIL plant is probably more than a quartz miner would spend on buying an entire processing system).

    Modern technological developments leads to the conclusion that gold-bearing quartz will soon be processed entirely by gravity and centrifugal systems - things are heading that way. Bendigo (BDG) is currently researching this concept (in preference to extracting quartz it seems - some miners lose the plot!)

    Consideration of these things leads to the conclusion that quartz mining is due for a huge resurgence but it will take some time for the markets to catch on. Bendigo, Perseverance and Beaconsfield unfortunately set back this resurgence by many years and Dominion's underground mine seems to be a distraction as it's not in the Lachlan fold belt and not Victorian. In other words Dominion is currently seen as unique.

    And how about developments in tunnel boring machines usually referred to as TBMs. There has been a huge global expansion of tunnel building over the past 15 years and the use of TBMs to such an extent that traditional underground mining can have all the characteristics of above ground mining whereby the ore trucks are only metres away from the excavation.

    The advantages of quartz mining are overwhelming - I could go on and on.
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