Gold Question: Primero Mining
I am a long-time investor, but relatively new to gold investing so I am hoping a more experienced metals investor can help me out here.
I have been researching PPP latley, but can't seem to understand some of their financials. For example, for the three months ended Sept 30, 2011, the following financials are given (from here: http://www.primeromining.com/Theme/Primero/files/Primero%20Mining%20interim%20Q3%202011%20Report.pdf)
They produced 27,450 ounces of gold equivalent and sold 27,633 ounces. With an average realized price of $1,668 for gold, I would expect the revenue to be: amount of gold equiv. sold * avg. realized price of gold = 27, 633 ounces * $1,668/ounce = $46,141,884. This is CLOSE to the revenue number given, but not exactly as they give: $46,079,000. Why is there a difference here?
At least the revenue figure I calculated is close, but I have no idea how they are calculating "earnings from mine operations." My guess was that it was: revenue from mining operations - costs from mining operations. They give the revenue figure of $46,079,000, but what about the costs? Shouldn't they be calculated as: gold equiv. produced * cash cost for gold equivalent = 27,450 * $641 = $17,595,450.
Then, earnings from mine operations would be revenue- costs = $46,079,000 - $17,595,450 = $28,483,550. However, this isn't even close to the figure they give of: $22,170.
Fools, what am I missing here? My guess is somehow these things are calculated differently and it is just my lack of mining knowledge.. any help here?