Lets look at it from a generalised economical & legislative stand point.
Small miners are normally a person or company operating under a Prospecting Licence (PL)
Mining activity.
- Open Cut
- Alluvial Gold
- 5Ha pegged or 50,000 sq M (maximum allowable land parcel under a PL)
- Crown land unrestricted (means no royalties payable to private land holder)
- Maximum depth up to 5 M
- No native title claim or other indigenous significant items.
- Maximum 5 year term
Application - assumes that your successful on the first submission $2060
Additional expenses - Geology, survey, pegging, public notices, public consultation etc. $2940
Sub total $5000
Environmental Rejuvenation Bond (based on the above) $5000per Ha or 10,000 sqM $25,000
Total Application fees and bond $30,000
So you get your approval to start digging, what are you going to dig with?
- Old dozer MUST have with rippers $20,000
- Backhoe (cheaper than buying excavator, truck and front end loader) $40,000
- Generator 20kVa $10,000
- Diesel powered Pump $10,000
- Wash plant 10-15 m/per hour (This is hard for me to price since I can make my own) $10,000
- Site Hut/Sea container $2000
Total plant and equipment $92,000
Grand total PRE START UP $122,000
The estimate above is based loosely on "best case cost" and could be well over $200k OR you could hire equipment as you require it, personally I'd rather own the asset.
Next is running costs which are completely subjective to environmental conditions, Condition of equipment, number of employees, subcontractors etc. However it is safe to say since everything we need runs on Diesel the diesel bill is going to be fairly consistent.
Now we also need to consider time taken to strip an area so the diesel bill must be carried as a liability before any material is run. As we are on a bush lease on crown land we could recoup some costs by selling the Common wood or tendering out the felling and removal of trees but this is an unknown and subjects us to the time frame of getting the trees gone.
We'll need someone to help out so the next cut can be getting stripped while we process Pay so there are wages and all related cost that go with employing people.
- Diesel 2000L per week @ $1.50avg/L $3000
- Employees x 2 @ $50/hr (includes super, workcover etc.) Min 60hrs/wk x 2 =120hrs $6000
- Other expenses ie: Port-a-loo, PPE, waste disposal, phone, internet, Insurance etc. $1000
Total weekly expenditure $10,000
***These costings do not include loan repayments or hire fee of equipment***
It can be summarized that it will be 2 weeks before the first cut is processed for a total ongoing cost liability of $20,000 which can be added to the $122,000 start up costs for a total of $142,000.
Once you've mined the gold processed it, sold it, paid your bills, paid your royalties to the gov, paid your tails fees and paid your taxes you may pocket $, so unless your mining 2g/m3 your likely to lose your shirt.
