Tyhee’s Energy Costs

In communication with Dave Webb today, here's what I learned.

Tyhee’s PA demonstrated very good economics study using fairly conservative estimates. Our Diesel costs assumed $140 per barrel fuel costs. Power costs were estimated, assuming then current diesel costs, at $0.35 per kwhr. The cost of its diesel plants, building, plus tank farm (capital costs) was estimated to be abut $20 million.

You should pay special attention to page 64 where you’ll find a quote from the Northwest Territories Power Corp (NTPC). This quote is for supplying hydroelectric power under two options:

The first has NTPC covering all capital costs when charging Tyhee $0.22 per kwhr. That’s a 33% savings on operating costs and a 15% savings on capital costs.

Or, Tyhee pays the capital costs which is 1%-2% more than what’s needed for diesel and Tyhee also pays $0.14 per kwhr. Doing it that way, Tyhee realizes a savings of 60% on its power costs!!!!

When you review the summary pages you’ll find power to be 50% of Tyhee’s million costs, so to reduce Tyhee’s milling costs by 30% would be Spectacular.

On page 65 of the PA, the last sentence states,

“Based on the preliminary evaluation of the NTPC and on the site generation options, selection of supply from NTPC is recommended.”

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