Economics of Contract Mining or Should I Use a Contract Miner?

This presentation will discuss a mine owner's evaluation to utilize a contract miner in the development and production of gold properties. I will address both the quantitative and subjective aspects of the evaluation process. The quantitative aspects include cost evaluation, capital preservation, acquisition and disposal of new and used equipment, administrative costs, recruiting and training, and organizing a staff and craft labor force. The subjective areas of this discussion include corporate philosophy, administrative concerns, contractor competence, loss of owner control, operating flexibility, financing assistance, recruiting and training program utilization and risk reduction. The evaluation of alternatives provides a system for comparing, on a cost basis, an owner/operator system vs. a system using a contract miner. The supplement provides a concept on how a contract miner may be the cost effective system to be utilized.