Investment Objective
For each project we generally only require between $100,000 - $250,000 of investment funds to make the required improvements. A water pump system and tunnel rails, along with proper tools and management, can increase production tenfold.
The type of projects that we look for are already producing and processing ore. They have either a proven or inferred resource and they require minimum capital expenditure in order to:
A) Return a better royalty to original owners (even considering they now have a lower holding because of the joint venture), and
B) Return royalties to Ore 2 Gold that enable us to profit from the joint venture (after our loss from selling gold at discount is factored in).
The investment funds will be raised through selling gold to investors at a discount. The intention is to have Gold ready to be delivered or collected by the investor after 3 months.
First in, first out
The reason why we are prepared to sell at a discount and effectively take a loss on the purchase price of the gold, is because the alternative to raise investment capital would be to sell off a percentage ownership in the mine or project which, over a longer period, would be worth more than the gold - even at a discount.
To have investors paid out as early as possible enables us to take a better return from the mine for the life of it, which could be 5 to 10 years or possibly even longer.
Return to the local community
To provide an example of how a project like this works to help the local community, a local mining community is seeking an additional $30,000 - $40,000 to expand their food crops. This is provided to them from proceeds of the mine after our initial investors have received their gold.
Furthermore, because investment has been made into the mines infrastructure, there will be continuous income paid to them throughout the life of the mine, which without our investment would continue to be slow and frustrating for the local artisan miners.
How do the figures stack up?
For the purpose of these calculations the two main variables have been calculated as such:
- Market price of gold - $1,400 / oz
- Grade of ore - 60 grams per tonne
Previous Operations
The mine is currently processing about 5 tonnes per week. The ore is very high grade but their processing technique only enables them to extract about 60% of the gold. At 60 grams per tonne this method produces about 180 grams per week or 9.36 kilos (330 oz) per year which sells for approximately $462,000. Bottom line - this is not good enough.
- 5 tonnes per week
- 60% recovery
- 9.36 kilos (330 oz) gold produced per year.
- Sale price - $462,000
Operations after investment
We come in and increase production to 35 tonnes per week and improve processing refinement to 95%. Using an average ore grade again of 60 grams per tonne produces about 2.1 kilos per week or 109 kilos (3,845 oz) per year, which sells for approximately $5,383,000. Bear in mind, the average ore grade from this mine was more than 100 (60 grams per tonne was what their tailings tested! Tailings is what is left over after the ore is processed). Therefore, it is not inconceivable that these figures could be doubled.
- 35 tonnes of ore processed per week
- 95% recovery
- 109 kilos (3,845 oz) gold produced per year
- Sale price - $5,383,000