Monetizing Tailing with Bonds

Kalib Loy • Feb 12, 2023

Case Study: How to monetize Tailings with Bonds

Uncovering Hidden Value: A Case Study of a Gold Mine in Arizona


The gold mining industry is one of the oldest and most established industries in the world. Despite its long history, gold mines still face challenges in monetizing their operations. In particular, many mines struggle with tailings, waste materials produced during the extraction process, which can contain small amounts of valuable minerals. In the case of a gold mine located in Arizona, this challenge was overcome through innovative thinking and strategic planning.


The mine's management team conducted a thorough evaluation of its tailings and discovered that there was a significant amount of gold that could be extracted through reprocessing. This realization opened up a new revenue stream for the mine, as the extracted gold could be sold to companies and individuals for use in various industrial processes.


To extract the valuable minerals from the tailings, the mine established a processing plant and implemented a multi-step process that included crushing and grinding, separating the minerals through flotation, and refining them to a saleable form. The refined gold was then sold to a variety of customers, providing a substantial source of revenue for the mine.

But that wasn't the only source of revenue the mine was able to monetize. The tailings themselves were found to have value and were sold to other companies for use in the production of construction materials and as fillers in products like paint or plastics. This provided an additional source of income for the mine, further maximizing its operations.

To finance a new project, the gold mine decided to issue a bond, which allowed it to borrow money from investors in exchange for a promise to repay the principal and interest at a later date. The bond proceeds were used to finance the project, and the mine was able to repay the bond successfully over time, further monetizing its operations.


To ensure that the bond issuance and other financial transactions were structured in the most effective and efficient manner, the mine sought the help of a private trust called Blue Shire. Blue Shire provided expert guidance and support to the mine, helping it to navigate the complexities of the financial world and achieve its goals.


In conclusion, this case study demonstrates that even the oldest and most established industries can still find new sources of revenue and growth. By leveraging their resources and seeking expert guidance, mines can unlock hidden value and maximize their operations. The story of the gold mine in Arizona is a testament to the power of innovative thinking and strategic planning in the face of challenges.


Overall Opportunity

The cost of the bond, also known as the interest rate, is 2.5% of the value of the bond, which is $35,455,000. To calculate the interest amount, we use the following formula:


$35,455,000 x 2.5% = $886,375


Next, we need to calculate the bank fees and commission fees. Bank fees are 0.5% of the value of the bond, which comes to:


$35,455,000 x 0.5% = $177,275


Commission fees are 1% of the value of the bond, which comes to:


$35,455,000 x 1% = $354,550


Finally, we need to calculate the amount monetized, which is 80% of the value of the bond less the bank fees and commission fees. The calculation is as follows:


$35,455,000 x 80% = $28,364,000

$28,364,000 - $177,275 - $354,550 = $27,832,175



So, the amount monetized would be $27,832,175, and the cost of the bond (including bank fees and commission fees) would be $886,375 + $177,275 + $354,550 = $1,418,200.


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