Costs and net profit Given the following information. Left pit wall overall slope angle: 52 ◦ Underground total mining cost: $37.50 /tonne Surface mining cost: $21.25 /tonne Surface stripping cost: $3.90 /tonne of waste Density of ore: 2750 kg/m3 S.G. of waste: 1.8 Strike length of orebody: 485 m Grade of gold ore: 8.2 g/tonne Dilution: 0 % Gold bullion selling price: $1150/oz Mill recovery: 92% Milling cost: $32 /tonne Tax rate: 32% The orebody outcrops at the surface. The existing surface is flat/level When underground mining at this operation should be contemplated, calculate: The total cost of mining the ore of the open pit. The total cost of mining the waste of the open pit. The expected net profit after income taxes for the life of the pit operation.
Costs and net profit Given the following information. Left pit wall overall slope angle: 52 ◦ Underground total mining cost: $37.50 /tonne Surface mining cost: $21.25 /tonne Surface stripping cost: $3.90 /tonne of waste Density of ore: 2750 kg/m3 S.G. of waste: 1.8 Strike length of orebody: 485 m Grade of gold ore: 8.2 g/tonne Dilution: 0 % Gold bullion selling price: $1150/oz Mill recovery: 92% Milling cost: $32 /tonne Tax rate: 32% The orebody outcrops at the surface. The existing surface is flat/level When underground mining at this operation should be contemplated, calculate: The total cost of mining the ore of the open pit. The total cost of mining the waste of the open pit. The expected net profit after income taxes for the life of the pit operation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Costs and net profit
Given the following information.
Left pit wall overall slope angle: 52 ◦
Underground total mining cost: $37.50 /tonne
Surface mining cost: $21.25 /tonne
Surface stripping cost: $3.90 /tonne of waste
Density of ore: 2750 kg/m3
S.G. of waste: 1.8
Strike length of orebody: 485 m
Grade of gold ore: 8.2 g/tonne
Dilution: 0 %
Gold bullion selling price: $1150/oz
Mill recovery: 92%
Milling cost: $32 /tonne
Tax rate: 32%
The orebody outcrops at the surface.
The existing surface is flat/level
When underground mining at this operation should be contemplated, calculate:
- The total cost of mining the ore of the open pit.
- The total cost of mining the waste of the open pit.
- The expected net profit after income taxes for the life of the pit operation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education