Whole sale exploration and development of Gold and base metals

Running head: ASSESSMENT TASK 2: DESCRIPTION
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Company Name: Golden Mile Resources Ltd. (ASX: G88)
Assessment Task 2: Description
Name
Affiliation
Author’s note

ASSESSMENT TASK 2: DESCRIPTION
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Introduction to the business and general business environment
The company chosen for investigation is the Golden Mile Resources Ltd. The
company is engaged in the whole sale exploration and development of Gold and base metals.
The company is engaged in the production and selling of Gold products. Golden Mile
Resources Limited is located in Western Australia. Its projects are divided into two regions
that is to say North-eastern Goldfields Project and regional Western Australia Project. The
organisation’s major customers include other businesses engaged in the jewellery and
ornamental industry. Most of the company’s customers are located in Western Australia and
across the internet (Ochieng, Seanego, and Nkwonta, 2010). The organisation’s major
competitors include BHP Group Ltd which is a global resources company. It is located in the
USA. Fresnillo is also a huge competitor and is involved in the exploration and production of
precious metals and it’s located in UK, London. BHP Group Ltd has a market share of 2%
compared to its competitors that have 5% and 20% for BHP Group Ltd and Fresnillo
respectively. On the basis of the above information, the organisation’s competitive
environment is closer to a perfect competition. The demand curve facing the firm is likely to
be relatively elastic. The implication for this is that the company has a high ability to ‘mark-
up’ its price above marginal cost (Blignaut, etal.2010).
Production Cost and Scale
In production process, there are resources that are used in producing final goods
(Output) and these are termed as factors of production. In economic terms, factors of
production are briefly defined as the inputs used in the process of production with the aim of
making abnormal profit. In this case, the factors of production are land, capital, labour and
enterprise (Ravix, 2014). Most significant is that, Land as factor of production involves all

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natural features, labour involves human resources, capital entails all the manmade resources
and enterprise entails all the other factors of production (Nitisha. 2018). In order to feel the
presence of all factors, all the factors are equally important for the production process of the
company.
The descriptions of factors of production are as follows;
Fixed factors of production
Land: In this context, land is taken as soil. On the broader term, land is a factor of
production that has much and larger scope. According to Alfred Marshall, Land refers to the
forces and materials with which the nature provides to the man freely for help. In the context
of the company, land is pre-termed as the natural resource that is used to produce goods and
services in order to generate income. However, Land with its natural resources (raw
materials) are considered to be limited in quantity. This means that when used in awkward or
wasteful way, it can be exhausted. Also, land is considered to have zero price on supply. This
depicts that any shift in the land’s price cannot necessarily affect the supply. It is also taken
as the factors of production that is immobile with permanent inherit properties. Besides, land
has got variations in terms of yields or fertility, this implies that it depends the nature of land
in order to gain more out of production process.
Enterprise: In this case, the enterprise is Golden Mile Resources Ltd which undertakes
the business ventures in order to get positive end result. An enterprise is categorized with the
individuals and physical assets who are entitled to the common goal of getting abnormal
profits. By considering the ‘Micro, Small and Medium Enterprises Development’ (MSMED)
act of 2006, enterprise is the company that undertakes all the activities entailed in the
production or manufacture of goods (Ravix, 2014). According to Schumpeterian theory, an
entrepreneur has all the powers of changing the way how the business operates since he is the

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one who decides on the other factors of production to yield efficient process of production.
Furthermore, Schumpeter urged that an entrepreneur is the one responsible to undertake risks
and at the same time possess capabilities of innovation through provision of resolutions for
the business to operate on optimal level.
Variable factors
Labour: Labour is considered as the most vital ‘Factors of production’ (FOP). It
therefore includes the issue of services rendered by individuals and efforts of goods and
services production. In economic knowledge, labour is termed as the work, mental or
physical carried in order to achieve monetary values. When any activity done by the worker
is taken for the sake of just doing, it is considered as wastage of time. Marshall urged that
labour is when the individual puts all the minds or body to fully or partially complete work
with a certain goal. Labour is the only factor of production that still lives (Mohr, 2014). The
following are the peculiarities of labour that is taken as the ‘non-durable’ factor of production
since it has no price that is reserved. It is also constituted as the weakest product in terms of
‘bargaining power’. This implies that, a shift in labour’s price automatically affects supply or
demand for labour accordingly. In this context, the supply of lab or will reduce when there is
some increment in wages and the opposite is true. On a company level as in this paper, it is
essential to organize division of lab or in order to maintain the flow of production process
since lab or is considered to be tiresome at any point.
Capital: Capital in this case refers to the income of the individual that is used for
creating more income. In this case, capital does not necessarily regarded as the initial ‘factor
of production’. Furthermore, Capital involves goods such as raw materials, machinery among
others. However, machinery and capital are goods that are initially purchased once. Also,
land cannot be taken to be capital since capital differs from land. For instance, land is natural,