Great article on our sometime client Newlox Gold (V.LUX):
“Once fully processed by the company, the gold is then poured into dore bars and sold off. All told, the company has cash costs of gold production of just US$600 per ounce as per the latest investor deck. In a rising gold environment, with gold currently trading with a spot price of roughly US$1,850, this represents an excellent return on production costs.
This method of gold production overall results in low capital costs for its small processing facilities, while also resulting in sub-one-year payback timeframes for the operations. Each new facility is budgeted to have capital costs of roughly US$2.0 million, while commissioning is expected to take approximately 6 months. Facilities have been designed by the company to be “cash cows” with the company budgeting for over $8 million in planned revenue per year per project to strongly support organic growth.”
I very much like Ryan Jackson’s small is beautiful approach. It keeps the CAPEX manageable and brings gold into production quickly and cheaply.
I own shares and hope to add more.