In case people missed this from the correspondence thread.
From Louie in response to my questions about the SS:"Appreciate it mate but we are as excited as ever as we can see the end result, hard for us to think short term playing a long game.
I really don't believe the market understands the scale, we could easily have done a short mine, higher NPV, kept it at a low capex, high IRR (high grade the project) but that is not what we are after. we want to build a big business and will be some setbacks along the way (we are in one now)
These large projects are not high IRR, anything over 15% you are doing good. ie; Livengood 1% IRR, KSM 10.4% and Donlin which is going to development is about ~6%
From Mark Bristow (Barrick CEO)
“We now look for more than 5 million ounces, and we want bigger assets because you get bigger value, but it’s harder to get those IRRs up into 20%,” says Bristow.
The new Barrick has set the IRR investment filter initially at 15%.
The market is seeing this as a DFS rather than our maidenfirst pass scoping study.This is ascoping study, now we can really optimise and find efficiencies and hone in on the most sensitive parameters we can control. Gee mate, tough crowd. We haven't even fully drilled out Korbel or RPM to indicated or extensional drilling. The PFS will look a hell of a lot different.
The main objective was to take test work and prove the flow sheet is viable and work on as stated above to find the best optimised mine plan. In addition, the payback period and the sensitivity so that the general investor can see what the high grade RPM will do for the project in terms of NPV. We used an NPV of 5% as we have over $70m in corporate tax losses, in addition to the Alaska Mining License Tax and the Exploration Incentive Credit Program which made the most sense during the payback period.
We are pushing ahead all guns blazing, once you put it together I think you can see the upside and where this will possibly end up with adding the rest of Korbel and RPM."
(20min delay)