Ann: Estelle Gold Project grows by over 50% to 9.6 million ounces, page-47

DYOR. Analysis is highly-speculative. You must do your own research and analysis. Do not treat as advice.
 Seek independent professional advice and make your own investing decisions.
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Plugging some numbers into my earlier DCF analysis I think there are scenarios where this could conservatively achieve a post-tax NPV AUD $437M post-tax for NVA's share.


I have used the following assumptions:

• 3 Moz indicated resource forming the basis of a future reserve ( this will grow before production )
• 5.5% mining dilution gives total ounces mined 2.84 Moz
• Steady state-production averaging 150 koz for 15 years Life of Mine
• USD $1650 gold price ( current gold price is USD $1800 ), so my numbers use 9.2% below the current gold price.
• AISC at USD $1050 based on the Probe Metals PEA (we need to wait for Scoping Study to get a better handle on potential AISC)
• 79.3% processing recoveries giving production ounces 2.25 Moz over life of mine from the indicated resource
• CAPEX I have derived from capital intensity of the Probe Metals project but at peak production in my model of 195 koz
• Depreciation & Amortisation at 7% of EBITDA
• Assumption is that production gold production royalties and toll fees for use of a future road will be factored into AISC

The estimate below is so conservative that the implied P/E is just 6.0 derived from post-tax NPV divided by average NPAT. GOR is trading at a P/E of 17.59, EVN at 19.0, WGX at 10.71. The market cap of GOR ( AUD $1.35B ) is an indication of potential trading range once a deposit producing 150,000+ koz pa could potentially be trading at. So about 5-6x upside in market cap ...

Average production in first 5 years in my model is 172 koz pa.



Some interesting things:

• Depth of overburden ranges from 0-22m and averages just 7m. This together with the shape of the ore body should help in achieving a low strip ratio.
• Oblique and long sections show that a low strip ratio, I think conservatively around 1:1 waste to ore could potentially be achievable for a starter pit which will be in the middle of the deposit.