Ann: General Security Agreement, page-76

Hi David,

My thoughts

• Adoption of future $300/oz is fair and reasonable as multi million ounce prospects (4Moz+) are generally value higher than sub 1Moz.
• Obviously, market sentiment also factors into this, could end up being more/less
• There is a recent broker report by Bell Potter valuing DEG which has adopted a similar valuation metric https://degreymining.com.au/wp-content/uploads/2020/11/DEG-201117.pdf
• Further to the above, they have estimated resource of the current deposits which they are drilling to define and applied the valuation rate and set that as a their target. Which a few months ago, they exceeded that target
• I think the best valuation would be the value the immediate ternera deposit and after sufficient drills at Drone Hill & Toro Gordo, form a view on resource potential and apply a discounted $ev/oz
  
• Following the MRE, the drilling will no doubt continue, there is still so much scope to expand on
• Following the scoping study, there will likely be more strategic drilling to target on what could be improved to uplift the financial metrics i.e. Focus on extending the depths on zones of CC250-CC500. Or further define Toro Gordo etc.
• The cost of discovery at El Zorro is very cost efficient, its a low discover cost/oz prospect
• Pretty confident 51 will be decent as 50 at depth was returning good high grades
• Also confident that at some point next year that at some point we will get close to the $1 Bil MC if the sector is in a permanent bull mode