A diamond mine requires 3 key aspects to produce cash flow
1 - Valuation per carat
2 - Grade (how many carats in a tonne)
3 - Operating cost to mine and process 1 tonne.
What is the margin for CH-6 predicted to be.
1 - Valuation = US$213 per carat
2 - Grade = 2.58 cpt (carats per tonne)
3 - Operating cost - Open pit focus = CAD$75 or US$60 per tonne
Profit margin = 213*2.58-60 = US$490 per tonne.
Where does this line up in the world.
Thanks to Mountain Province (MPV) who have recently posted a presentation that lists this out very clearly.
Here is a link to the presentation -- MPV Presentation
Go to Page 5.
Chidliak barely fits on this chart...as the chart tops out at US$500 per tonne puts it well ahead in 1st place.
That is with CH-6.
If CH7 and CH44 come back with comparable valuations as per ch-6, then those would hit 1.04 x 213 - 60 = US$180 per tonne would place those in 3rd or 4th place on that chart.
A lot of mines talk about cpht (carat per hundred tonne). Chidliak has been focused on cpt (carat per tonne) since day 1.
Chidliak is still argumentatively one of the top valued rock in the diamond world and quite possibly the highest margin diamond mine in the world.
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ReplyDeleteWhat does that have to do with diamond mine margin and ROI?
ReplyDeleteYou have to have margin (ie. Positive cash flow) to consider being able to pay back the capital requirements of the project. Once that pay back occurs..then you need the remaining margin to either reinvest or pay dividends to the shareholders. Is that not related to ROI?
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