Ann: Funding Update for Wiluna Stage1 Development, page-30

I tend to agree @Hiddenvalue. Committing to a 175koz hedge over (4) years : just not the right time at the moment. I've done some rough kitchen table calcs which seem to suggest that if they layered a $40m gold swap & 175koz hedge on top of their existing delivery commitments to Polymetal & Trafigura, they'd probably need to optimistically stretch their current annual production expectations for Stage 1....

Polymetal:

• The greater of: (i) 70% of sulphide gold concentrate produced from Stage 1 or (ii) 122.5 kt of concentrates containing at least 195k oz gold
• Grade of concentrate : 195000 oz / 122,500 t = 1.59 oz / t
• 195,000 oz / 3 years
• 65k oz/yr

Tafigura:

• 52,500 t of gold concentrate @ 1.59 oz /t
• 52,500 t / 1.59oz = 33.02k oz (over 3 years)
• 11k oz/yr

Mercuria$40m gold swap:

• 4 year repayment term
• POG $2250 /oz
• 5k oz/yr (very rough but reasonable guess)

MercuriaGold Hedge

• 175,000 oz (over 4 years)
• 43.8k oz/yr

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Approx. 125koz/yr needed to service the above.

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