They have certainly gone aggressive with the assumptions they...

They have certainly gone aggressive with the assumptions they have used. A 5% discount rate is laughable. To use a US$1,700 gold price is also very aggressive. Having said that they have a willing Indonesian JV partner which is a big plus and we are presently in a gold market environment which will more than likely see Nusantara get the finance they need to build this mine. These feasibility studies are more about painting a project in a positive light so as to get the finance they need to progress the project, so I am not surprised about the assumptions.

The relatively low head grade really needs to be considered in the context of the waste removal and recovery rates. The LOM strip ratio is 4.69 and the average recovery rate 93%. The strip adjusted recovery grade is about 0.21 g/t. Compare this to Capricorn Metals (ASX:CMM) Karlawinda project which has a head grade of 0.9 g/t, a strip ratio of 3.6 and a recovery rate of 92% for a strip adjusted recovery grade of 0.18 g/t. Capricorn's recoverable oz are trading for an EV per oz of US$350/oz. Nusantara's 60% of the project's recoverable oz are trading for about US$42/oz. Granted Indonesia has a higher risk profile than Australia but there does appear to be value in Nusantara at these price levels. In my opinion this project at face value does appear to offer strong leverage to a higher gold price.

At the end of the day I would also like to see more conservative assumptions used in these studies (it would give this press release more credibility) but it is what it is.