The economic efficiency of investment in the development of reserves of small groups of geographically contiguous gold deposits

Abstract

The object of the research is a group of geographically contiguous low volume gold deposits. The subject of the study is an economic justification for a way to involve economic turnover to get a positive commercial result on a specially formed group of gold deposits, in which individual field development is unprofitable. A small production volume, combined with high capital and operating costs are objective reasons for the reduction in investment attractiveness of the deposits which have reserves of gold of <25 tons in the “supply and demand” chain. The economic result will be fundamentally different if the production capacity of the company is increased by combining geographically contiguous low volume deposits in the group where the total reserves of the mountain holding are represented as one deposit. A criteria was developed and it was determined that the economic and technological constraints for the deposit to enter the group would be outpacing growth of the recoverable value of reserves as compared with a decline in their gold content. Deposits of the group are rationally developed on a rotational basis with a seasonal operating mode of small mining enterprises (with an annual underground mining of 5000–50000 tons up to 100,000 tons, with private ownership >50%), equipped with a mobile processing complex with deep processing technology on highly liquid commodity products on site. An economic-mathematical model was devised to determine the rational placement of the processing capacity of the group.A simulation was conducted and an economic evaluation was performed on the effectiveness of investments in individual and group mining projects. The simulation results show that the joint exploitation of the reserves of the group of deposits, the internal rate of return on investments exceed the rate of return of funds to the bank deposit, the return on investment is above the level of inflation. The group project complies with the strategic line of small mining companies in terms of cost recovery terms, availability of financial sources to cover expenses, provision of stable means of income and obtaining competitive advantage.