Ann: High gold recoveries achieved at Hemi, page-145

The following is from MOY's 2018 Annual Report:

For the first time in 2019, this exploration campaign will focus both on high‐grade oxide and sulphide targets, with a processing solution for sulphide ore set to come on‐stream in the coming months.

The low‐cost processing plant expansion requires the addition of a small modular concentrating circuit to the tail‐end of the existing carbon‐in‐leach (CIL) plant. This is well‐understood and widely‐used technology, with construction well underway at the time of writing this report and commissioning on‐track to commence in April 2019.

Recent metallurgical testwork has confirmed outstanding gold recoveries from sulphide ore, delivering recoveries of more than 80% from pyrite‐dominant ore and approximately 70% from arsenopyrite‐dominant ore.

The test work was undertaken using two innovative processing techniques – in‐mill oxidation (INOX) and pressurised in‐mill oxidation (PINOX) – both of which are being patented by Millennium.

The exceptional recoveries achieved on highly‐refractory arsenopyrite‐dominant ore (Millennium’s previous cyanidation test work delivered gold recoveries averaging less than 30%), were achieved using the PINOX process, and as a result, Millennium is now planning to undertake a two‐stage expansion of the Nullagine processing plant.

The first phase, comprising the addition of INOX to facilitate processing of pyrite/arsenopyrite‐dominant ore, will be completed at a capital cost of $15 million, with commissioning scheduled for April 2019.

The second phase, comprising the addition of PINOX to facilitate processing of arsenopyrite‐dominant ore, will be completed for an additional capital cost of $5 million, with commissioning targeted for early 2020.

With a total capital investment for the two‐stage sulphide plant expansion of just $20 million, this project has the potential to deliver a very strong return on investment, with the opportunity for Millennium to deliver highly‐profitable additional ounces at Nullagine by processing sulphide ore.

Seems like yesterday was overdone. MOY's plant was 1.5 million tons per year and it cost them $20 million to retro-fit a system. De Grey's will be larger but the equipment will be designed in at the start which should result in cost savings over MOY's cost. My guess would be around $25 to $30 million extra for equipment to process the sulfide ore.

With gold at $80 per gram and we have at least 2 grams per ton, we have $160 as break even. If they run 25 million tons thru the plant over 10 years the extra equipment works out to $1 a ton. Of course operating costs increase but I'll leave that to experts to figure out a cost per ton.