1. How to Get a Metal Price for a Concentrate

2. Example of a Copper Price
Suppose your research indicates a price of $3.25/lb
Of course this is a price for finished copper – what if you produce a sulfide flotation concentrate?
Your flotation concentrate will be smelted into blister copper which will in turn be electro-refined to pure copper
Let us first consider electro-refining
Suppose we determine that acid dissolution followed by plating out electro- won copper costs 20 cents per lb (you will need to determine your own cost)
Electro-refining reduces the value of the previous step – blister copper to $3.05/lb
Suppose to the electo-recovery is 99.5%
To account for loss in the step $3.05*0.995 = $3.035

3. Now I need to deal with Smelting
Suppose my sulfide concentrate is 30% copper (the grade will vary with mineralogy but 27-32% is where things will usually fall)
Suppose that it costs me $7/ton to ship concentrates
(this will vary with shipping and destination)
Suppose I find that the charge for smelting concentrate is $95/ton
(you will get your value from a smelting schedule or perhaps Mine Cost Service)
Suppose that smelting converts 96% of my copper in concentrate to blister copper
1 ton of concentrate contains
2000*0.3*.96 = 576 lbs

4. Turning it into a cost $102 / 576 lbs = 17.7 cents per lb for smelting
Value of Blister Copper $3.035
Subtract the smelting cost
$3.035 – = $2.86 / lb
Unaddressed issues
Electro-refining uncovers potential values in the anode slimes
There may be credits for things such as selenium
There may be penalties for some impurities or wastes
Arsenic can be a penalty
Disclaimer
The numbers in these slides are for illustration purposes and should not be considered as a source of actual values or costs.

5. Example of a Precious Metals Concentrate
Suppose I value gold at $1,200 per troy oz.
Suppose I have produced a free milling gold concentrate
Example suppose my ore contained 0.03 troy oz per tonne gold and the same amount of silver
Suppose 12% of the silver was in with the gold
Gold nugget will be about 25% gold
One tonne of ore yields 0.03 troy oz
But suppose recovery is 95% troy oz
At 25% purity the concentrate weighs troy oz
Since silver concentration was the same and 12% was in the gold nugget
They troy oz of concentrate contain troy oz of gold troy oz silver

6. Continuing the Example
Suppose our concentrator handles 40,000 tonne per day and all the gold is free milling
40,000 tonne per day provides
40,000 *0.114 oz/ton = 4560 troy oz of concentrate or (12 troy oz/lb) or 380 lbs (dry basis)
Suppose the smelter has a treatment charge of $1.50/oz
Since the concentrate is 25% pure the effective charge is $6.00/oz for refining
$1200/oz – $6 = $1194/oz
But suppose the smelter only pays 95% of gold
$1194/oz *0.95 = $ /oz
But suppose we get 93% payment on the silver

7. Continuing with the silver credit
There is oz silver per oz of gold
If silver is $25/oz the is 0.112*25 = $2.8 in silver
We get 93% Net Smelter Return $2.6 in silver
Add that on $ $2.6 = $ per oz/gold
Of course you may want to handle the silver separate
If we do then 12% of the contained silver gave us
At 95% recovery - $2.6 * 0.95 = $2.47/oz in situ
(we will also get dollars from silver in the copper and free milling silver to add)
Omission note – most smelters have an assay charge on each batch of gold concentrates
In this example we did not establish the size of batch we sent

8. Now lets look at Silver
Suppose my ore contains 0.03 oz/tonne of silver
Suppose that 76% is free milling and the rest is in with the gold or copper
We already have the silver in with the gold
Suppose our free milling silver recovery is 90%
0.03 * 0.9 * 0.76 = oz/tonne
Suppose our concentrates are 20%
We get oz concentrates/tonne
Suppose our treatment charge is $0.25 per oz
At 20% purity concentrate our silver is charged $1.25/oz
$25/oz - $1.25 = $23.75/oz

9. Silver Continued 93% net smelter return $23.75 * 0.93 = $22.09/oz
Looking at the big silver picture
12% of our silver has 95% recovery and is paid for at $23.25/oz (treatment to gold)
76% or our silver is 90% recovery and is paid for at $22.09/oz
Now we need to find the fate of the silver in the copper
And weight the average for use in MSOPIT