Gold Mining Break-Even Analysis: $289K Monthly Revenue Target

Fixed costs $230.8K/mo site base cost

Contribution margin 80% after variable costs

Break-even revenue $288.5K/mo monthly target

Break-even timing Month 1 launch month

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a gold mining operation.

Lean Base Full

Monthly revenue Revenue drives the margin that has to cover fixed costs. $ Low sales High sales Variable expenses These are costs that move with output and sales. $ Lower cost Higher cost

Money available to cover fixed costs $1,564,834 $1,981,667 revenue - $416,833 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lower fixed Higher fixed

Break-even chart Revenue Total costs

Which mining expenses stay fixed, and which move with output or sales?

Cost classification

Break-even is only useful if fixed site overhead, unit production spend, and scale-linked staffing are separated. If payroll, haulage, or compliance is treated as flat, the model can show Month 1 break-even while still hiding cash pressure.

Expense	Cost	Break-Even Treatment	Common Mistake
Mine site lease	Fixed	Include $35,000 per month in fixed overhead from Month 1 through Month 60.	Spreading the lease across ounces and hiding the monthly cash floor.
Security services	Fixed	Include $18,000 per month before testing margin on any production volume.	Assuming security falls when production slows.
Gold direct extraction	Variable	Apply $70 per ounce against gold output in the break-even volume math.	Using only revenue percentages and missing unit extraction spend.
Gold ore processing	Variable	Apply $50 per ounce as output rises or falls.	Treating mill activity as fixed even when throughput changes.
Gold royalty payments	Variable	Apply 1.5% of gold sales revenue as a revenue-linked deduction.	Entering royalties as a flat monthly fee.
Logistics and transportation	Semi-variable	Model the usage-linked portion at 3.0% of first-year revenue, then update as volumes scale.	Treating haulage as flat when shipped tons change.
Environmental compliance variable portion	Semi-variable	Apply 1.5% of first-year revenue for the variable portion tied to operating activity.	Budgeting compliance as one fixed permit line.
Operations supervisors and equipment operators	Semi-fixed	Step payroll up when staffing rises with output, including operators moving from 10.0 FTEs in the first year to 25.0 FTEs by the fifth year.	Keeping payroll flat while production capacity increases.

How does break-even shift from lean to base to full gold output?

Scenario table

Break-even improves as throughput rises. The lean case is still under water because fixed costs outrun contribution, but the base and full cases turn profitable and add cushion as more metal spreads site overhead.

Planning cases only; actual break-even will move with grade, recovery, pricing, and byproduct sales.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean case, Year 1 output	$2,378K	$476K	$2,308K	80.0%	-$406K	Below break-even; it needs tighter costs or better recovery.
Base case, Year 3 output	$5,021K	$938K	$2,992K	81.3%	$1,091K	Above break-even with a modest cushion if output and pricing hold.
Full case, Year 5 output	$6,596K	$1,138K	$3,283K	82.7%	$2,175K	Strongest cushion; higher throughput covers fixed overhead better.

What breaks the break-even plan first: lower gold sales or higher mine costs?

Stress test

The base plan is already below break-even, so small swings matter. A 10% sales drop, a 15% fixed-cost bump, or higher fuel, power, recovery, and royalty costs all widen the gap fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$2,886,000	$904,000 gap	Year 1 revenue still misses break-even.
Revenue shortfall	Year 1 revenue falls 10% to $1,784,000.	$2,886,000	$1,102,000 gap	A small sales dip pushes the gap wider.
Fixed-cost increase	Fixed costs rise 15% from $2,308,000 to $2,655,000.	$3,319,000	$1,337,000 gap	Lease, security, and overhead inflation raise the floor.
Margin pressure	Variable costs rise from 20% to 25% of revenue.	$3,078,000	$1,096,000 gap	Fuel, power, recovery, and royalties squeeze margin.
Combined pressure	Revenue falls 20%, variable costs rise to 25%, and fixed costs rise 15%.	$3,540,000	$1,954,000 gap	Lower sales and higher costs create the widest gap.

What should you verify before signing the mine site lease and buying major equipment?

Founder checklist

Treat Month 1 break-even as operating math, not payback. The model still carries a 58-month payback and a -$75.956M cash trough in Month 12, so the real test is whether ore quality, processing access, and cash runway hold before you commit.

1Grade proof$23.78M Y1

Verify test results and recovery rates can support first-year revenue before you lock the $35k monthly mine site lease.

2Base burn$230.8K/mo

Add the $95k monthly fixed stack to the $1.63M Year 1 payroll so you know the real burn before scaling.

3Contribution80% CM

Check that product costs, logistics, and compliance still leave about 80% contribution margin (cash left after variable costs) in Year 1.

4Crew ramp10 operators

Confirm the opening crew can run the mine and plant now, then scale the operator count without choking throughput.

5Cash floor-$75.956M

Stress-test reserves against the Month 12 cash low, because capex lands long before the model’s operating cash flow catches up.

6Offtake path10,000 bars

Lock in refining, haulage, insurance, assay, and security workflows before the first 10,000 gold dore bars move out.