Newly invented formula for gold production improvement
EQV is acronym for Equipment, Quality, Volume.
Understanding the Equipment part of the EQV formula
Equipment in the EQV formula stands for Equipment and its capacity. It may be used to estimate the future gold production, and to find out what is wrong in the present production.
It is being used as a triangle of three related factors influencing each other and resulting with gold production. By improving one of the factors, the other factors automatically raising.
Let us say you have the following gold prospecting equipment:
- 20 pans, each capable to process a tonne of material per day
- 10 wheelbarrows each capable to transport 5 tonnes per day
- sluices for ore processing, capable to process 30 tonnes per day
In this example there are of course other necessary factors such as energy, water, pumps, and people. That is why we define the Equipment part of the formula as Equipment and its capacity.
If 20 pans are actually used by people, each of the pan may handle a tonne of material per day. There is certainly expense in hiring and paying small scale miners to use pans, but that expense may be justified if per each tonne there is few grams of gold.
Let us say we have all that equipment in use, and each part of equipment when used will produce more gold and income than the expense we have paid for the production.
While wheelbarrows are rather for transport and not for final processing, that equipment would be important but not in the summary calculation. If wheelbarrows are necessary for sluices and pans to reach the estimated capacity, they have to be considered in the calculation.
Sluices would process 30 tonnes per day, and 20 people with 20 pans another 20 tonnes. The used equipment capacity is 50 tonnes per day.
Equipment is connected to expenses.
The Equipment part could be also called Capacity. I have to be practical, as small scale miners cannot easily think with capacity as it is too abstract. It is much better to tell to a small scale miner how he has to increase the number of equipment parts or to get better equipment. That is how a small scale miner increases the potential capacity of the ores to be processed.
The Equipment part in this case would be 50 tonnes per day. That is the estimated capacity, considering that wheelbarrows usage has to be calculated when calculating expenses.
Understanding the Quality part of the EQV formula
The Quality part of the EQV formula relates much to the average grade of gold per tonne of material processed. It can be any other weight measure too. It also relates to type of the ores, and to the quality of concentrate. It is also connected to expenses.
The quality of gold relates not only to the total gold contained in the ores, but also to the recovarable gold. As if you have improper equipment, and technology, you may recover less gold. If you have better equipment to recover more gold, you will have a higher Quality factor.
If one has the soft ores that may be easily and cheaply processed in large volumes per day compared to hard ores with much higher grade but also with higher expenses or with slower time, one would choose to process the soft, not dense. Even with lower grade, faster speed of the processing of soft ores, with less expenses would make such ores higher quality in that case.
The quality also relates to available equipment and volume that can be processed.
Even 1 gram per weight of one tonne of ores, may be considered high quality ore if such ore may be processed with less equipment and higher volume.
Understanding the Volume part of the EQV formula
The Volume part of the EQV formula relates to the actual and estimated volume processed. The Equipment part relates to the capacity. The Volume part is the actual capacity used by the equipment.
One requires organization, clear instructions, and plan, including the hard work, to increase the Volume being processed.
However, the Volume processed would rarely go over the potential capacity of the Equipment part unless one is smart enough to increase the potential capacity of the available Equipment.
EQV formula parts relate to each other
Each part of the EQV formula directly relate to each other. The increase of any of the factors would automatically bring the increase in other factors.
With more and better Equipment for mining, one would be able to process more Volume of the ores. By having more Equipment, the Quality of ores in relation to Equipment would automatically increase. It is a matter of viewpoint too. At one point of time, a miner may consider only gold nuggets in ores as being high quality ore. He may as well loose gold and income by thinking that smallest particles need not be collected. He may not have the best equipment to handle smallest particles invisible to human eye. What if the miner at later point of time finds the better equipment and become able to collect 50% more gold than before?! The Equipment thus may influence the relative Quality of ores and concentrate.
Finding better Quality of ores would directly influence the gold production. The gold production would influence the income, and out of the income, there would be more Equipment purchased and more Volume processed. Thus the increase of Quality of ores automatically increased the Equipment and Volume parts of the formula.
By thinking on how to increase the Volume processed, one would automatically become more aware of various gold grades. When excavating on various locations, such ores would be measured for the gold grade. The Quality part would be increased by increasing the Volume of ores processed. In the same manner, the increase of Volume of ores processed would directly influence the purchase and acquiring of new Equipment.
By increasing one part of the EQV formula or EQV triangle, one is automatically increasing the other parts. By increasing Equipment, one influences the Quality and Volume, and by increasing and finding better Quality, one increases the Volume and Equipment too. Same is for the Volume, by increasing the Volume actually processed and handled, one will increase the income, and thus find better Quality and more of the Equipment.
The result of the EQV formula is Gold Production
The result of the EQV formula is gold production. The gold production depends of these 3 very important factors, the mining Equipment, the Quality of ores and concentrates and the Volume of actually handled and processed ores.
The EQV formula
Gold Production = Equipment + Quality + Volume
Gold productions equals the number of Equipment parts in use plus the Quality of ores and concentrate plus the actual processed Volume of ores.
The EQV Income and Expenses Formula
Gold production is connected with income and expenses. Most important part in mining is to keep expenses down. The gold production is not equal income. There are too many large gold mining companies that are producing tonnes of gold per month, but without any income for years and years. That is because they have their expenses higher than the gold production they make.
To keep the expenses down and to raise the actual income out of the gold production, here is the newly invented expanded EQV formula for income in gold mining.
Newly invented and expanded EQV formula for income out of gold mining
The expanded EQV formula for income in gold mining have following factors:
Expenses in purchasing and maintaining the Equipment. These expenses also relate to the people that one need to hire, feed, provide medicine for, provide accommodation for, all the necessary expenses relating to Equipment have to be considered. This includes the investment. Investment and assets such as equipment are for accounting purposes not the expense. But for practical purposes they are also not the money either. The assets and investment of the company that relate to Equipment will have a direct influence on the income from gold mining.
Expenses in finding, researching and maintaining better ores Quality. These expenses have to be considered. As often one may skip to search for better Quality of ores, and deplete the present one with the possible interruption of the gold mining process. Constant search, researching, prospecting and maintaining the Quality of ores and concentrate requires expenses to be paid for energy, people, tools, and equipment used in the process.
Expenses in Volume processing of ores and concentrates. These expenses relate to energy, people, resources used, so that a mining company may handle the Volume of ores.
Other expenses of the mining operation or company. The accounting, administration, offices, and everything what does not directly influences the gold production, or what is not part of the EQV formula belongs to other expenses.
The EQV formula itself is part of the expanded EQV formula for income in gold mining.
Income and gold production are two important factors in the expanded EQV formula.
The expanded EQV formula for income in gold mining in short
INCOME = Gold Production - (Expenses(EQV) + Expenses(Other))
The INCOME equals the GOLD PRODUCTION less the EQV EXPENSES and OTHER expenses.
Review of the expanded EQV formula
The expanded EQV formula when observed and applied, may bring increase of income in the gold production. The gold production alone does not determine the income. If a gold mining company have spent millions just on research of the gold mining land, to find the best Quality of ores, even if Quality is found, the income may not be in sight or reachable in the near future.
The small scale miners approach is to keep income over expenses. Small scale miners never spend considerable money before producing gold. Think about that.
They take a pan and go straight to the stream or river, or to the alluvial mining place. They excavate soil with minimum of expenses. And they get the gold, they sell it and they have the food, medication, accommodation, they build their houses, often 5 - 10 houses for each of the family members. Gold mining production can be profitable.
However, one must think of the expenses.
By keeping low expenses of the Equipment in use, by thinking on the higher Volume that can be processed by such Equipment, and by considering best ways to find Quality ores, and relating those factors to each other, and always thinking to have least possible expenses, one may have income with certainty.
Practical use of the expanded EQV formula
When purchasing mining equipment, always ask and find out the information about its potential capacity per certain period of time. You can have the best gold recovery piece of equipment, but if it cannot handle large volume of ores, it may be unusable for you. Ask for the expenses of the maintenance. How many times the equipment has to be checked per year? Find out the ongoing expenses for a longer period of time.
To find the best ore Quality one need not necessary pay US $100 per a drilling meter depth. Sometimes simple questioning may find best ores. That is how small scale miners do it. They go around and ask other people. When they find out the location with good Quality of ores, that is what they start excavating. To get better Quality and to maintain the Quality of ores and concentrate, one need to constantly pay expenses of research, mining, prospecting, assaying, analysis. Practical small scale miners approach to find the better gold grade or better ore Quality is to simple use a small pan and peak and maybe a hammer. A miner will crush the rock with another rock or with the hammer and will pan the rock content and find out how many gold colors are inside. By using this simple approach one may see on the example how expenses for the Quality research may be lessened.
Volume in the EQV formula shall be fairly easy to apply. If Equipment allows to be processed 80 tonnes of ores per day and your team of miners is processing only 30 tonnes, a manager of the mining site shall see why is this happening and remedy it. Maybe there are simply not enough people. By calculating and estimating, people would be increased. But not on the expense of income! One shall not hire more people if the Quality and final gold production and final income does not allow it. The Volume may be increased by various ways. Maybe a simple implementation of usage of wheelbarrows or the conveyor belt may increase the actual Volume processed. There are many smart ways to increase the Volume. Just start thinking about it.
Expenses have to be observed overall. Before purchasing something, think is it justified? Does the purchase directly influences and increases income? If yes, go ahead. If no, re-think it twice. Keeping income over expenses is one of important principles in any business and in life, especially in gold mining. Expenses have to be sorted by the EQV formula factors and as other expenses. Sometimes "other" expenses ruin the income. Cut them. Lessen all expenses that are not necessary and keep the income over expenses.
Checklist for EQV formula application for our clients
Clients of the program to Start Your Own Gold Mine receive special checklists to correctly apply the EQV formula. Such a checklist is a useful tool that helps with the low investment gold mining startup.
Each of the factors of the EQV formula have to be correctly estimated and later during the production adjusted and maintained.
Equipment has to be estimated in advance, and during the production, the expenses and capacity of the Equipment has to be adjusted and maintained. Same is valid for Quality factor and Volume factor.
The EQV formula may seem very abstract to some of you readers. That is why you need another example.
Example of practical EQV formula application
Let us consider a small scale miner that lives in Mwanza, but wish to excavate material in Geita. His only tool is a traditional Tanzanian sluice to wash soft ores and recover gold with mercury. He does not have mercury, but uses service of another miner to process his concentrate with the mercury. He must travel from Mwanza to Geita and back and those travel expenses belong to other expenses. Also his food and temporary accommodation in Geita belong to other expenses.
He may process just 100 kilograms per hour, making it 1 tonne per day. Maybe he knows already the average quality and he knows that he may get 5 to 10 grams per tonne.
He knows that he needs one hour to excavate the tonne of material, to put it in bags and to bring it to the processing place with the traditional Tanzanian sluice.
His EQV factors may be following:
- expenses to travel from Mwanza to Geita and back are at least 20,000 Tanzanian shillings.
- expenses of his temporary accommodation in the bush are not more than 5,000 shillings for few days
- expenses to purchase peak, hammer, testio pan, bags, cloths, are estimated to be 40,000 shillings
- he must also eat, drink water or tea, and maybe take some medicine, that could be 15,000 shillings for 3 days
- he may handle in 3 days, 3 tonnes of material himself, that is his Equipment capacity
- he may be lazy and not actually work for 3 days, he may be lazy for 4 hours every day
- maybe he works harder and increases his Volume by working 2 extra hours every day
- he decided to work 10 hours per day, to reach his quota of 3 tonnes in 3 days
- he has got a concentrate and pays the mercury processing with 15,000 shillings for 3 days
- he has recovered 10 grams of gold worth 650,000 shillings
- His GOLD PRODUCTION is 650,000 shillings
- His Equipment capacity used is 1 tonne per day, 3 tonnes in 3 days
- His Quality was 3.33 grams per tonne
- His Volume processed was 3 tonnes in 3 days, with expenses of 15,000 shillings
- His other expenses are travel, accommodation, equipment, food, water, medicine, and this is 80,000 shillings
- His income is the difference between the 650,000 shillings less the 15,000 shillings for mercury and less the 80,000 shillings for other expenses
- His total income is 555,000 shillings
I have seen this happen exactly in the above described manner. This virtual small scale miner may get higher income if he works harder, or if he purchases more equipment or maybe hire few people to help him with the mining, thus increasing the Volume processed. He may also choose to excavate material and ores on another location, with better gold grade, thus increasing his Quality. He may choose to be lazy and lessen his total income or ruin his gold production. He may also choose to drink some cognac, to go to restaurants, eat expensive food, and pay for taxi, and that would lessen his total income.
Sample EQV Formula Estimate of Gold Production
Saturday 2017-03-18 (GMT+3) 18:07:35 - Gold Price: US $1229.25 ================================================== SYOGM: SYOGM - EQV Formula - Estimate ================================================== (E) - Equipment capacity: 2.00 tonnes per hour (Q) - Quality of gold and ores: 6.00 grams per tonne, of 95% pure gold (V) - Volume of ores to process: 20 tonnes per day in 10 working hours ================================================== EQV = Gold Production (idealistic estimate): ================================================== Daily estimate: 114.00 grams per day or US $4,505, EUR 4,196, TZS 9,938,211 Monthly estimate: 3,419 grams per month, or US $128,404, EUR 125,885, TZS 298,146,340 Yearly estimate: 41,039 grams per year, or US $1,621,954, EUR 1,510,621, TZS 3,577,756,091 ================================================== Expanded EQV formula, income without overall and full expenses: ================================================== Running expenses (not accurate) in US $397,129, EUR 369,869, TZS 876,000,000 per year Income after expenses in US $1,224,825, EUR 1,140,752, TZS 2,701,756,091 per year Sharing part for license holder: 20.00% and for SYOGM: 80.00% ESTIMATED YEARLY INCOME: Income for license holder in US $244,964, EUR 228,150, TZS 540,351,218 Monthly income, after expenses: US $20,413, EUR 19,012, TZS 45,029,268 Income for SYOGM in US $979,860, EUR 912,601, TZS 2,161,404,872 Monthly income, after expenses: US $81,655, EUR 76,050, TZS 180,117,072
By thinking on the expanded EQV formula and by applying the EQV formula parts on the gold mining production, one is going to increase the income with certainty.
Every gold mining production in the world can be viewed through the prism of the expanded EQV formula factors.
And every gold mining production and income may be improved and increased by using the simple and expanded EQV formula.
The EQV formula was developed by myself, my name is Jean Louis, mentor to Start Your Own Gold Mine.
I hope that you will apply and use the EQV formula and increase your own gold mining production.
- EQV Formula - Example Evaluation of Future Gold Production
- Practical application of the EQV Gold Production formula
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