Metal Mining Break-Even Point: $327K in Monthly Sales

Fixed costs $147K/mo Overhead base

Contribution margin 86% After variable costs

Break-even revenue $327K/mo Monthly target

Break-even timing Month 1 First breakeven

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a metal mining operation.

Lean Base Full

Monthly revenue Revenue drives the margin available to cover fixed costs. $ Low sales High sales Variable expenses These are direct costs that rise as production and sales rise. $ Low costs High costs

Money available to cover fixed costs $57,385,541 $65,775,367 revenue - $8,389,826 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which mining expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even is reliable only if fixed overhead, payroll blocks, and per-unit costs stay in the right buckets. Keep $147,000 monthly fixed overhead separate from $135,000 Year 1 payroll, and never treat royalties or freight as fixed.

Expense	Cost	Break-Even Treatment	Common Mistake
Mine Site Lease	Fixed	Include $50,000 per month in fixed overhead from Month 1 through Month 60.	Scaling lease expense with production tons.
Regulatory Compliance & Permits	Fixed	Include $25,000 per month in fixed overhead for the planning range.	Dropping permits after opening month.
Year 1 Payroll	Semi-fixed	Show separately from fixed overhead; Year 1 payroll is $135,000 per month before later staffing steps.	Blending payroll into the $147,000 overhead line.
Security Services	Semi-fixed	Start with the $10,000 monthly charge, then add coverage blocks when site scale requires it.	Treating every added shift as per-ton labor.
Lithium Royalty per Ton	Variable	Apply $400 per ton to Lithium Carbonate production in the unit margin.	Treating royalties as fixed overhead.
Shipping & Logistics Costs	Variable	Apply 4.0% of revenue in the first year, then use the model’s lower annual rates.	Using one flat monthly freight number.
Sales & Marketing Commissions	Variable	Apply 3.0% of first-year revenue when calculating contribution margin.	Calling commissions fixed because the rate is contracted.
Lithium Processing Energy	Semi-variable	Model it against throughput and revenue; the source assumption is 1.0% of Lithium Carbonate revenue.	Calling all plant energy fixed.

How does break-even change across lean, base, and full mining output?

Scenario table

Break-even stays covered in all three cases because output, realized prices, and fixed-cost spread rise with scale. The lean case still clears the line, but the full case carries the widest cushion.

Planning assumptions only; actual output, recovery, and power costs can move these results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 output	$25,044,167	$2,546,529	$282,000	89.8%	$22,215,638	Clear of break-even, but the cushion is thinnest here.
Base Year 3 output	$65,775,367	$5,950,772	$339,500	91.0%	$59,485,095	Best balance of throughput and fixed-cost spread.
Full Year 5 output	$106,518,500	$8,499,675	$398,667	92.0%	$97,620,158	Strongest cushion; fixed overhead is spread across the most volume.

What breaks the break-even plan if prices fall or costs creep up?

Stress test

A 10% price drop cuts monthly revenue from $250 million to about $225 million, while fixed costs can rise from $282,000 to $338,400. The real danger is cash, because minimum cash still falls to negative $144,908,000 in Month 9.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$250,000,000	$0 cushion	Clears break-even on paper, but cash turns negative in Month 9.
Revenue shortfall	Realized metal prices fall 10%, cutting monthly revenue to about $225,000,000.	$250,000,000	$25,000,000 gap	Lower price erodes contribution even if output holds.
Fixed-cost increase	Fixed costs rise 20%, from $282,000 to $338,400 a month.	$250,056,400	$56,400 gap	Overhead creep is small alone, but it still tightens cash.
Margin pressure	Variable base rises 10%, from $347,000,000 to $381,700,000 a month.	$381,700,000	$131,700,000 gap	Diesel, power, reagents, royalties, and maintenance do the damage.
Combined pressure	Revenue falls 10%, fixed costs rise 20%, and variable costs rise 10%.	$381,756,400	$156,756,400 gap	Lower grade, lower recovery, shutdown delays, and maintenance overruns can break the plan by Month 9.

What should you verify before you commit to the mine build?

Founder checklist

Verify the build can survive the cash ramp before you commit. Month 1 break-even looks fine on paper, but the model still bottoms out in Month 9, so rights, throughput, and working capital all have to clear together.

1Site control$315M build

Lock mineral rights and site control before any land spend, because this plan commits $315M across rights, infrastructure, fleet, plant, exploration, reclamation, lab, and IT.

2Offtake proof5 products

Prove buyers for lithium carbonate, gallium metal, cobalt sulfate, neodymium oxide, and dysprosium oxide before you order the plant, because the first-year sales plan depends on all five streams.

3Margin mix86.1% CM

Check that the combined contribution margin stays near 86.1% in Year 1, after product COGS plus sales and shipping costs, so fixed overhead can be absorbed.

4Fixed load$147K/mo

Make sure the $147K monthly fixed load is safe during ramp, since lease, permits, monitoring, security, office, insurance, R&D, and IT start on Month 1.

5Staffing ramp14 FTE

Tie hiring to throughput milestones and start with about 14 FTE in Year 1, so labor grows with production instead of ahead of it.

6Cash cushionMonth 9 low

Fund working capital through the Month 9 cash low of about -$144.9M, because Month 1 break-even does not mean the mine has cash safety.