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The term “base
case” refers to the project as described
in this study. It represents SRK’s
best preliminary estimate of gold production,
and capital and operating costs. The gold
price assumption in the model was varied to determine
the “break even” gold price for the
project. At a 5% discount rate, the base
case model indicates a break even project is achieved
at a gold price of US$399/oz.
Under SRK’s base case analysis, life of
mine cash operating costs average US$213 per ounce
and total costs, inclusive of capital, average
US$358 per ounce.
Sensitivity analyses were also run for these
two scenarios; firstly a 50% increase in mineable
tonnage, and secondly cost reductions of 15% for
both capital and operating costs. At a 5%
discount rate, the break even gold price was reduced
from US$399/oz to US$350 and US$338 respectively.
In its report, SRK has deemed the exploration
potential at the project to be “excellent”.
The calculations taken from the SRK Report use
the "All Categories" resource estimate
set out in the table above, which includes inferred
resources. Mineral resources are not mineral
reserves and do not have demonstrated economic
viability. The foregoing economic projections
are preliminary in nature, they include inferred
resources that are too speculative geologically
(without additional work) to have the economic
considerations applied to them that would enable
them to be categorized as mineral reserves and
there is no certainty that these estimates and
assumptions will be realized.
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