Ann: Finding More Gold, Faster, page-45

Based on the information provided in the announcement, here's an analysis of potential free cash flow using toll treating:

Revenue Calculation

• Total resource: 14,900 oz @ 6.8 g/t Au
• Gold price: AUD$5,100/oz
• Gross revenue: 14,900 oz × AUD$5,100/oz = AUD$75.99 million

Key Cost Components

1. Mining Costs:

• Small-scale open pit mining for near-surface transition material: ~AUD$40-60/tonne
• Underground mining for fresh material: ~AUD$120-180/tonne

2. Toll Treatment Costs:

• Processing costs: ~AUD$35-50/tonne
• Transport costs to nearby mill: ~AUD$15-25/tonne
• Recovery loss (assuming 90-95% recovery): 5-10% of contained gold

3. Royalties:

• WA state royalty (2.5%): ~AUD$1.90 million
• 1% NSR mentioned in the document: ~AUD$0.76 million

Estimated Cash Flow Calculation

For the total resource (68,400 tonnes):

• Mining costs: ~AUD$8.2-12.3 million (average ~AUD$150/tonne for the predominant fresh material)
• Toll treatment + transport: ~AUD$3.4-5.1 million (~AUD$50-75/tonne)
• Metallurgical recovery (assuming 92%): ~14,900 × 0.92 = ~13,708 oz
• Recovered gold value: ~AUD$69.91 million
• Royalties: ~AUD$2.66 million
• Additional overheads, site costs and administration: ~AUD$2-3 million

Estimated Free Cash Flow:AUD$69.91M - AUD$8.2-12.3M - AUD$3.4-5.1M - AUD$2.66M - AUD$2-3M = AUD$46.85-54.65 million

Key Considerations:

1. High-grade nature (6.8 g/t Au) provides robust economics for toll treating
2. The deposit's near-surface characteristics would allow for lower initial mining costs
3. The resource contains primarily fresh material (66,500 tonnes of 68,400 total tonnes)
4. Small resource size makes toll treating more economical than building a standalone plant
5. The potential for resource expansion could improve project economics

This analysis suggests a strong potential free cash flow of approximately AUD$47-55 million before tax, or about AUD$3,150-3,670 per ounce of gold recovered. However, actual results would depend on final metallurgical recoveries, contract terms with the toll treatment facility, and the mining method selected.