C. Wells,


All costs, including processing come from the August 2009 Prefeasibility Study, page 98, Table 6. A cost of $24.98/ton has been converted to $27.54/metric tonne. So, I'm not just pulling these numbers out of thin air. However, what I didn't notice is that these are in American dollars (page 99). And they are assuming an exchange rate of $0.85 US dollars for each $1.00 Canadian (see page 97). Therefore, the actual processing cost is understated in my model, since Canadian dollars are worth a lot less in the study:


($27.54 USD / metric tonne) x ($1.00 CAD / $0.85 USD) = $32.40 CAD/tonne


All things being equal the other costs must rise accordingly. I'm already assuming a gold price of $1700 for the revenue stream. To get back to your question, why are Timmins Gold processing costs so much cheaper? I haven't checked this out, but I'll take your word for it that they are. I do know Their mill throughput is going to be 18,000 to 30,000 tpd. High volume means lower costs. Here is where economy of scale comes into play. When you process in small batches, you pay more.