Ann: Cost Optimisation Delivering Significant Savings - Goulamina, page-51

Amazing announcement, best we've seen so far. Genuinely surprised that we didn't see more of a bid.

The writing has been on the wall for this one ever since management released the presentation stating cost reduction targets. I calculated that costs should come in around $310/t if the minimum targets were hit. Good to see that management have smashed that with ~$275/t on the way.

Now we have an official announcement proving that the economics of Goulamina will stack up against the big boys, i.e. PLS ($1.55B MCap which = ~67% of the pre-tax NPV I calculated from their most recent PFS) & KDR ($1.75M effective MCap which = ~165% of the pre-tax NPV I calculated from their recent SS).

BGS producing @ 2Mtpa for 380ktpa of concentrate with CAPEX of $130M and OPEX of $275/t, selling @ $600/t for 20 years, with 10% discount rate & 0.75 FOREX results in the following pre-tax figures:

NPV: > A$1B AUD
IRR: >90%

BGS is currently trading @ ~6.5% of this figure.