mutiny gold - looking forward, page-3

AJT

There are so many assumptions in you calculations which seem idealistic that anything you have projected beyond 2013 looks highly speculative.

I have done my own set of numbers, an exercise that has highlighted a number of issues with your numbers, including:
1. Your inherent interest rate(s) of between 4% and 7% seem incredibly low. Basis for these? If you use 12.5% the overall debt numbers look quite different.
2. Try assuming that operating costs will rise 10% pa, and everything changes
3. You have assumed that all of the options will be exercised – optimistic
4. You have assumed $1,650-$1,800 gold. This is likely to vary between $1,200 (at which rate MYG go broke) and $3,000 over the next 5 years. If we have $3,000 it is likely that inflation will also be very high, so operating costs will rise faster than my suggested 10% annual rate.

Overall, my big issue is that it is looks likely that MYG will never pay down their debts. Even using your idealistic assumptions, you don't have it being paid off until 2018, which to me is a lifetime away.

K