Ann: Dalgaranga Gold Project - Mineral Resource Estimate Update, page-265

I am no way an expert on the issue of the cost of developing a mine but here is my two cent worth which more knowledgeable posters can correct for my errors. CMM have updated their Gibson mine development cost. The total cost is $260m plus $83m pre-production mining working capital or a total of $343m.

The $260m cost includes the following which SPR already has to my knowledge but some may require enhancements ie additional costs ( given CMM is developing an OP mien not sure all the the items below are needed):::

- Mine access roads;
▪ Earthworks for process plant, access road and access tracks;
▪ Mechanical infrastructure for the process plant including potable water supply, sewerage
treatment, RO plant, process plant buildings and workshop, light vehicle fuel storage facility
and site communication system;
▪ Administration offices, workshops and stores;
▪ Mechanical infrastructure for the mine including fuel storage facility, heavy vehicle
workshop and stores, heavy vehicle wash bay;
▪ Water supply pipeline and associated borefield;
▪ Unsealed airstrip to facilitate its use by mid size (70pax) aircraft;
▪ Village construction for approximately 400 rooms;
▪ Power generation and fuel storage facilities; and
▪ Light vehicles and various mobile plant.

Is anything else missing?

In addition there is the processing plant (CMM plant is 5mtpa) which SPR will need to enhance and they need a tailings dam and no idea what SPR plan for that (maybe the old open pit ha ha but probably not!). They will have the drill drive completed and paid.

I assume they will use a mining contractor which I assume will mean they do not need to outlay capital for underground mining and related equipment.

So the biggest costs seem to be pre-production working capital (maybe the CMM figure is okay as an estimate) and upgrading the plant plus the tailings dam (unless they have one to use for a period of time before needing a new one) but there will be a number of other smaller costs. $300m seems very high and $200m seems more sensible but still may be a bit high.

Any other views?

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