pro's con's & conjecture, page-52

Jantimot

These costs will eventually become part of the C1 costs so if you want to include them now as part of the capital dont add them at the other end of part of the mining costs. Point is we are so far advanced with mining and not producing you expected these figures to be high.


j. Exploration and Evaluation

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that the Consolidated Entity’s rights of tenure to that area of interest are current and that the costs are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.

k. Mining assets

Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further
mineralisation in existing ore bodies, to expand the capacity of a mine and to maintain production. Mining
development also includes costs transferred from exploration and evaluation phase once production commences in the area of interest.

Amortisation of mining development is computed by the units of production basis over the estimated proved and
probable reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable
reserves which can be recovered in the future from known mineral deposits. These reserves are amortised from the
date on which production commences. The amortisation is calculated from recoverable proven and probable
reserves and a predetermined percentage of the recoverable measured, indicated and inferred resource. This
percentage is reviewed annually.

Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need
for restoration.