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Message: Re: San Gold loses $4.63-million in Q3 2010

Nov 14, 2010 01:34PM

Are you suggesting this has become a make work operation, keep the boys busy so they don't opt for greener pastures?

Not at all. However operationally they probably made money on the RLM. It is all the fixed costs that you incure just running an office etc. As for speeding up the developement, I am not speaking from experience, however there are only so many miners that can be fit into a tunnel without serious safety concerns. I am a production manager of a large fish processor and I have seen what can happen when a CEO insists that all overheads are applied to every species of fish we run through the plant. When you stop processing because a paper pusher considers it a money loser your plant sits idle for a part of the year that a certain species is in season. Guess what. A big chunk of the overhead ie; property taxes, financing charges, building and infrastructure maintenance, receptionist etc. still require capital. Our mandate now is that any processing provides at least a minimum contribution to overhead. It sounds to me that the RLM is still contributing a fairly substatial contribution with the dollars generated from the gold produced.

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