{"id":3364,"date":"2015-10-10T16:59:08","date_gmt":"2015-10-10T20:59:08","guid":{"rendered":"http:\/\/blog.silver-investor.com\/?p=3364"},"modified":"2018-06-10T10:54:49","modified_gmt":"2018-06-10T10:54:49","slug":"color-outside-the-lines","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/color-outside-the-lines\/","title":{"rendered":"Color Outside the Lines"},"content":{"rendered":"

 
\nRichard (Rick) Mills
\nAhead of the Herd
\nAs a general rule, the most successful man in life is the man who has the best information
\nMining is an extremely capital intensive business for two reasons. Firstly mining has a large, up front layout of construction capital called Capex – the costs associated with the development and construction of open-pit and underground mines. There are often other company built infrastructure assets like roads, railways, bridges, power generating stations and seaports to facilitate extraction and shipping of ore and concentrate.
\nCapex costs are escalating because:
\n  \u2022 Declining ore grades means a much larger relative scale of required mining and milling operations
\n  \u2022 A growing proportion of mining projects are in remote areas of developing economies where there\u2019s
\n   little to no existing infrastructure
\nThere is also continuously rising Opex, or operational expenditures, to consider. These are the day to day costs of operation; rubber tires, wages, fuel, camp costs for employees etc.
\nThe bottom line? It is becoming increasingly expensive to bring new mines on line and run them.
\nThe reasons behind flat-lining gold production, and record cash and all-in costs, are numerous:
\n  \u2022 Production declines in mature mining areas
\n  \u2022 Slower than expected ramp-ups of output
\n  \u2022 Development time up
\n  \u2022 The entire resource extraction industry suffers from a lack of skilled people
\n  \u2022 Extreme weather
\n  \u2022 Labor strikes
\n  \u2022 Protests
\n  \u2022 Increasingly more remote and lacking in infrastructure projects
\n  \u2022 Higher capex costs
\n  \u2022 Increased resource nationalism
\n  \u2022 Increased environmental regulation
\n  \u2022 More complex metallurgy
\n  \u2022 Lower cutoff grades
\nIn 1998 the world\u2019s top two highest grade mines were SMM\u2019s Hishikari Mine in Japan @ 50g\/t and Barrick\u2019s Meikle mine in the U.S. @ 32g\/t. In 2011 the world\u2019s top two highest grade mines were Newcrest\u2019s Gosowong in Indonesia @ 25g\/t and goldcorp\u2019s Red Lake mine in Canada @ 24g\/t.
\nIn 2014 Klondex Mines Fire Creek Mine in the U.S. was the world\u2019s highest grade mine @ 44g\/t and coming in second place was Kirkland Lakes Macassa Mine in Canada @ 22g\/t. Declining mined and mineable gold grade is a direct result of the industry\u2019s inability to discover new high grade\/high margin deposits.
\nRead rest of article here.<\/a>
\n <\/p>\n

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.
\nAs publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time!<\/strong> Where will you be when this happens?<\/p><\/blockquote>\n

 
\n

Join The Morgan Report Free for 30 Days *<\/strong><\/span><\/a>* 30 Day Trial applies to new user sign ups only!
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  Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information Mining is an extremely capital intensive business for two reasons. Firstly mining has a large, up front layout of construction capital called Capex – the costs associated with theMore<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,89],"tags":[],"yoast_head":"\nColor Outside the Lines<\/title>\n<meta name=\"description\" content=\"Color Outside the Lines\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.themorganreport.com\/blog\/color-outside-the-lines\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Color Outside the Lines\" \/>\n<meta property=\"og:description\" content=\"Color Outside the Lines\" \/>\n<meta property=\"og:url\" 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