EQV Formula - Example Evaluation of Future Gold Production

EQV Formula - Example Evaluation of Future Gold Production


We have been contacted by potential client, that has given us an insight into the artisanal type of gold mining production where he wish to engage. A list of expenses and investment into machinery has been provided, and the proposal.

List of proposed expenses for a year

EQV Formula evaluation

Evaluating the present proposal of this client is conducted by observing the EQV Formula factors such as Equipment, Quality and Volume.

1) Equipment factor of the EQV Formula for gold production relates to the capacity of overall Equipment to handle certain Volume of ores. Such information shall be gathered on a list, and equipment shall be verified daily or weekly to be in good shape to handle certain capacities. By knowing the capacity of the equipment, it is possible to know to what extent the Volume of ores can be processed and to what extent certain Qualities of gold ores and gold particles may be recovered. By increasing the Equipment capacity, the other factors such as Volume and Quality are to increase automatically, and expanded gold production is taking place.

2) Quality factor relates to quality of gold ores, type of ores, sizes of gold particles, purity of gold in ores, and it is directly related to the equipment. High grade soft soil with large gold nuggets in abundance would represent high Quality factor, and such ores would directly influence the expansion of Equipment factor and it would help to process larger Volumes of ores. Low grade ores in very deep underground area, hard to reach and excavate, with high expenses, would represent a low Quality factor.

3) Volume factor relates to the actually processed volume of ores, or planned Volume of ores. It is directly related to the capacity of the Equipment to process such volume, and it depends of Quality of ores and gold.

Answer to the client engaged in artisanal mining

Dear Client,

Thank you for the insight. That is nice that you are exploring Tanzania, and meeting people and reviewing business opportunities.

Just as when you see one car, the only car you can see on an isolated island becomes demanded, regardless what type of car it is.

That is why you should review many other gold mining opportunities.

Here is my opinion on Project Proposal

  1. I must say, it is poorly written proposal, without proper strategy and tactical planning. Further, there is missing part "Drawn by:" as required by Tanzanian law. It is not just a proposal, it is a contract. Contract poorly written may cause so many problems in future, and may not stand the court pressure.

  2. By contract, you are to spend 50,000,000 Tanzanian shillings, which is US $22,335 for "clearing the site" which is not clear to me what that should be.

  3. You are to receive 70% only, which is too little. For that money, you can receive 100%. Why would other side be sharing with you, if they are not investing? That makes no sense. Profit sharing shall be fair exchange between the parties.

  4. The contract is thus out of exchange, there is no fair exchange between parties, and you are paying for nothing in return but a hope, there is no guarantee for gold bearing ores.

Here is my opinion on the Cost Estimate

1) Meals are not 15,000 Tzs per person, that is very incorrect. A meal for a person can be cooked directly on the site, and if contract stipulates your full control, then you should be taking care of kitchen. A meal for a worker on the site is maximum 3000 Tsh per full day, to include breakfast, lunch and dinner. 15 workers are thus maximum of 1350000 Tanzanian shillings per month, and not 6,750,000 Tanzanian shillings. In general food can be cheaper, like 2000 per worker, as it is one kitchen to provide it to them.

2) Tents or housing for 1 million is very expensive. If we speak of tents, such are bought for less than 50,000 shillings, with some wooden poles, so maximu of 100,000 shillings is per tent, and not 500,000 Tsh. For 500,000 you can build a wooden house, and add some money for the metalic roofs. I have built it myself so. Nobody shall have just tents on mining sites, that is poor safety.

3) Allowances of 20,000 are alright, that is good pay, however, it is also questionable why there are 15 workers for the work that does not require so many workers. In general, workers on mining sites are paid less such as 10,000 per day. But if you wish to pay 20,000 Tsh, that is alright. I would not pay that amount until they are fully trained and capable of performing the duties.

4) Compressor hiring per day of 120,000 Tsh is expensive. We are importing 7 compressors, and 22 pneumatic hammers now, which we are to provide to our clients, as a privileged benefit, without expenses. In 3 months, you will spend 10800000 shillings, so you could as well purchase compressors from us, it will be a better deal for you. You can see here how we are testing a compressor:

5) Diesel and gasoline, looks just fine to me.

6) Blasting items, explosives, you can get for 50% cheaper, when ordered by yourself from other countries. We can provide it.

7) Smelting process is way too much, as 2,600,000 Tanzanian shillings is over 1000 euro, and the price of the melting furnace in Europe for 1 kilogram is just 250 euro, with importation maybe 350-400 euro, which is double less.

8) Transporation of 10 tonnes can be totally avoided by putting equipment and excavation together. Further, 150,000 Tsh per 10 tonnes is exaggerated, as you can rent truck for 300,000 per day, and not per tonne.

9) Jaw crusher for 12,000,000 shillings, hiring, is way too much. A new jaw crusher you can buy for that money, you would pay one time only.

10) Local ball mill crusher is not adequate for ANY mining work, and you should FORGET thinking about it. The capacity of 150 kg is not adequate for serious work. Further, the price of local crusher is not 15 millions, the price is 8 millions.

11) Generator of 3 millions must be a serious generator. However, I do not see for which machine you would need such large generator. It looks exaggerated again.

12) Administrator cost of 1,500,000 seems way too much, as it should be obvious that administrator is to earn much more money on the above too expensive items. If you should have site under your control, you should have your own mining site fully in your own administration.

This is your liability and estimate of expense for a year (LOSS)

For one year, this is your expense:

Your TOTAL EXPENSE per year is 595,800,000 Tanzanian shillings.

Your TOTAL expenses per year in dollars are US $266,146 as of today Thu Jun 22 14:00:55 EAT 2017.

This is short estimate of gold mining production

Equipment, Quality of gold and Volume processed

Considering that capacity is 150 kg per hour, 10 hours per day, you would have 300 hours per month or 3600 working hours per year, and with 150 kg, that is 547 tonnes per year.

Your expense per tonne is 1,089,213 Tanzanian shillings, while our expense per tonne is 120,000 Tsh and less.

If each tonne is giving you just 5 grams of gold, 547 x 5 grams = 2735 grams and if we calculate that with gram being some US $38, you would get 2735 x 38 dollars = 103930 dollars back.

Your estimated LOSS

You would invest US $266,146 and you would receive US $103,930 back, provided there is 5 grams per tonne.

If there is even 10 grams, you would not even reach the expenses.

You would be in minus according to those details, and calculating idealistically.

How to gain more money?

I am attaching the proposal and the investment estimate for running the gold mine for you to get a full picture and advise accordingly.

My advice is to rather keep money in the pocket then go into that. You will end up with more money on the end of the year.

Strategy requires mathematics

I am working out an all out strategy with them though they have been so nice to me but after your feedback I ought be with someone knowledgeable in the field.

It is impossible to devise strategy without knowing details of gold mining business. You have started it already in risky manner.

In fact, you do not need to know much of details, as simple mathematics on that proposal is enough to show you that it is not workable that way.

Estimate per week

Do you think looking at the same list of their estimate, is 600 grams per week feasible?

We calculate 7 days x 10 working hours x 0.150 tonne per hour x 5 grams = 52.5 grams.

It is feasible to make 52 grams in a week, PROVIDED, and UNDER CONDITION that there is 5 grams recovered from one tonne.


Review that simple analysis, and use mathematics.

Obviously, they know mathematics very good, they have calculated a lot of expenses, but forgot to speak about gold bearing ores.

Proposal to Start Your Own Gold Mine

1) Equipment like that CANNOT BE used. That is waste of money, time, energy. With much less money is possible to have 3 to 5 tonnes per hour. We can help you have capacity of 3-5 tonnes of hard rock per hour. None of equipment will be produced in Tanzania.

3000 kg per hour is 20 more than a local ball mill how they are proposing.

2) We will obtain much better sharing ratio, you will be paying maximum 10% to license holder, and one license can be given to you with 100% sharing ratio for you, and to license holder you will not pay 50 millions, but 6 millions ONE-TIME only, or 300,000 per month fixed, and only if you have gold.

3) You will get mining site ONLY if there is gold, and if there is no gold, we find mining site with gold.

4) You will be provided with full training for you, and your people, until you become able to control it yourself, with management, organization, prospecting methods, full equipment, daily routines, and we will provide you with better housing, accommodation, container.

5) We provide you with compressor that is yours. All machines become your own machines. Jaw crusher, hammer crusher, Raymond mills, ball mills. We work with water, wet material, that does not depend of the rain or sun, it can be processed under any weather, and it can run day and night.

6) Until you start producing gold, your only fee to us is US $66,000. Once you start producing gold, you will continue paying operating expenses.

7) The process of gold processing as described is poor, and you cannot use it, you need to learn proper methods.

8) There is no need for too many people, and all people will be trained, including you, and in case you are not there, we keep strict discipline on mining site.

Proposed estimate of gold mining production

With 6 grams per tonne:

Thursday 2017-06-22 (GMT+3) 00:29:59 - Gold Price: US $1244.6
Client: SYOGM - EQV Formula - Estimate
(E) - Equipment capacity: 3.00 tonnes per hour
(Q) - Quality of gold and ores: 6.00 grams per tonne, of 95% pure gold
(V) - Volume of ores to process: 30 tonnes per day in 10 working hours
EQV = Gold Production (idealistic estimate):
Daily estimate: 171.00 grams per day or US $6,842, EUR 6,133, TZS 15,317,806
Monthly estimate: 5,129 grams per month, or US $195,012, EUR 184,005, TZS 459,534,192
Yearly estimate: 61,559 grams per year, or US $2,463,312, EUR 2,208,060, TZS 5,514,410,309
Expanded EQV formula, income without overall and full expenses:
Running expenses (not accurate) in US $586,969, EUR 526,147, TZS 1,314,000,000 per year
Income after expenses in US $1,876,343, EUR 1,681,913, TZS 4,200,410,309 per year
Sharing part for license holder: 10.00% and for Client: 90.00%

Income for license holder in US $187,634, EUR 168,191, TZS 420,041,030
Monthly income, after expenses: US $15,636, EUR 14,015, TZS 35,003,419

Income for CLIENT in US $1,688,708, EUR 1,513,721, TZS 3,780,369,278
Monthly income, after expenses: US $140,725, EUR 126,143, TZS 315,030,773

With 3 grams per tonne:

Thursday 2017-06-22 (GMT+3) 00:30:39 - Gold Price: US $1244.6
CLIENT: SYOGM - EQV Formula - Estimate
(E) - Equipment capacity: 3.00 tonnes per hour
(Q) - Quality of gold and ores: 3.00 grams per tonne, of 95% pure gold
(V) - Volume of ores to process: 30 tonnes per day in 10 working hours
EQV = Gold Production (idealistic estimate):
Daily estimate: 85.50 grams per day or US $3,421, EUR 3,066, TZS 7,658,903
Monthly estimate: 2,564 grams per month, or US $97,506, EUR 92,002, TZS 229,767,096
Yearly estimate: 30,779 grams per year, or US $1,231,656, EUR 1,104,030, TZS 2,757,205,154
Expanded EQV formula, income without overall and full expenses:
Running expenses (not accurate) in US $586,969, EUR 526,147, TZS 1,314,000,000 per year
Income after expenses in US $644,687, EUR 577,883, TZS 1,443,205,154 per year
Sharing part for license holder: 10.00% and for CLIENT: 90.00%

Income for license holder in US $64,468, EUR 57,788, TZS 144,320,515
Monthly income, after expenses: US $5,372, EUR 4,815, TZS 12,026,709

Income for CLIENT in US $580,218, EUR 520,094, TZS 1,298,884,638
Monthly income, after expenses: US $48,351, EUR 43,341, TZS 108,240,386

Jean Louis, mentor to Start Your Own Gold Mine
Our website: https://www.startyourowngoldmine.com
Our contact: https://www.startyourowngoldmine.com/contact/index.html

Phone in Tanzania: +255-626-100000

Pages related to EQV Formula for Gold Production

Call Communication and Reporting Officer I/C of Start Your Own Gold Mine company in Tanzania, Mr. Gabriel Masanyiwa, on +255626100000

If you wish to call mentor Mr. Jean Louis for anything relating to Start Your Own Gold Mine simply call the number or on mobile devices click on this phone number +385958185403 to get immediately in touch, regardless of the time zone.

Current location of Mentor to Start Your Own Gold Mine

I am Mr. Jean Louis, mentor for Start Your Own Gold Mine program and I am currently located in Kozarska Dubica, Bosnia and Herzegovina, for purposes of construction of gold mining equipment Europe, and private purposes. I am managing teams of people in Uganda, Kenya, Rwanda and Tanzania and handling purchases and manufacture of mining equipment. We are also promoting our Tanzanite gemstone inventory.

You will need either to contact me or Communication and Reporting Officer I/C, Mr. Gabriel Masanyiwa in Tanzania as described.

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