It is important to estimate capital and operating costs at the early stages of the gold project, and are usually under constant revision and refinement as more information becomes available. It has been noted that the first estimates for feasibility studies are based upon supported processing capacity, which is believed that the gold ore supply will justify, and preliminary data on the gold grade and metallurgical performance of the available ores. As more data is collected on ore supply and possible plant location, it is possible to improve the estimates with increasing confidence in their general reliability. Basically, at some stage these first estimates complemented with studies of other important factors such the gold ounce price; outline the basis for decisions on mine design and gold processing plant construction.
It is important to mention that not ordinarily the most critical factor in these feasibility studies, the processing and related facilities comprise the largest area of capital expenditure in production operation exploiting normal gold ores in different places. Essentially, the gold mill is furthermore the cash register for the project. In this way, mill erection is therefore committed only after adequate study in which outside consultants usually participate in different levels. Habitually, the detailed costs estimates are prepared by engineering construction contractors in the elaboration of contract proposals. Detailed design for purchasing and construction follows contract execution, although contracting practice is usually variable according to the location of the gold project.
The treatment of complex gold ores needs a higher investment for a given capacity because of the necessity for additional treatment steps, longer process times, more complex circuits and generally more intensive conditions. The cost of size reduction equipment varies depending on the ore hardness or the necessity for fine grinding to achieve an appropriate liberation of gold. Also, variations in the orebody and multiple ore sources, with each ore having different characteristics, need additional facilities for ore storage, blending and sampling.
The time value of money plays an important role. The annual profits generated by a gold project must be sufficient to pay back within a reasonable time the money invested in the project. It is the job of mining people to estimate the payback period. One of the important elements in a feasibility study is the costs, and it is impossible to suggest what the costs might be for a particular gold project without looking at all the details of the planned operation, and reasonable estimates can only be obtained when complete information is available. The final estimate will be as dependable as the information used to arrive at the individual cost estimates from which is derived. The prices for the gold project will have to pay for labor, electrical power, supplies and the commercialization of the gold concentrate or Dore bar are the factors that influence the capital cost.