AUZ 0.00% 1.0¢ australian mines limited

Ann: Appendix 3B, page-40

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    The BFS is modelled with zero debt repayments included. Thats how they work. They don't know what the interest rate or repayment terms would be at this stage so it is modelled without it. Any repayments need to come out the cashflow quoted in the modelling and they have said they will look to fund 40% equity and 60% debt so any numbers you run personally should include what you think those repayments will be.

    A discount rate is different. A discount rate reduces the value of the cashflow in the NPV calculation by 8% per year due to the uncertainty of the future. The IRR figure is the discount rate that would make the NPV of the project zero (15% in this case).

    Discount rate and interest rate on debt are very different.
 
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