What to expect from the BFS? They are going to take into account the new fiscal regime. Remember this will be a revenue based system that is pretty much a royalty style tax. In return we do not pay corporate tax.
I am not sure what levels of tax we pay but the ones we definitely need to pay are the following,
Royalty 3% (those with bigger reserves pay 5%) Sales tax 2% (if gold is exported, i am not sure if it is) local participation 2% (funds go straight to locals)
revenue tax 5% (The only info i can find on this is 1600$-1700$ gold price 9% tax, 1200$ and below no tax, over 2500$ 20% tax.
So total tax is 12% or 16% (if you want to assume 1600$+ gold price).
Total cash cost including sustaining capex will be around 411$+18$=429$/oz. (sustaining capex refers to the difference between 32.6m initial capex and 37m life of mine capex)
Assuming gold price is 1450$, the tax payments would be 1450$ x 12% = 174$ per oz gold.
Add this to total sustaining cash cost and you get 603$ per oz life of mine average. This figure is after tax and excludes exploration and admin fees. I believe C3 should come in way below 750$ putting this mine as very profitable. Barrick and majors are producing at total cost of ~1200$.
Another thing to consider is the newly announced reserves and resource. They will have an impact on BFS numbers. Not sure about capex if it will increase or decrease.
Bottom line is there is a lot of margin for error or unexpected nasties.
MSR Price at posting:
8.6¢ Sentiment: Buy Disclosure: Held
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