Ann: Positive Pre-Feasibility Study for Mayoko-Moussondji, page-2

A very good announcement.

OPEX $40p/t.

CAPEX for 2.5mtpa operation $181m or CAPEX intensity of $72p/t which is a very strong figure. EQX has gone for the lease of rolling stock option. The CAPEX intensity diagram on page 3 shows the importance of having the rail and port already in place.

IRR of 25.1%, NPV $115m. NPV is a bit low if you consider EQX may likely need to bring in a strategic partner to take 50% of the development, but the upside is that the financial measures have been calculated using only the indicated resource. 70% of the resource still sites in inferred, and if this was moved to indicated with further drilling, the IRR and NPV would improve significantly as the mine life was extended.

IO price assumption of $74p/t gives confidence that the study is not based on fanciful IO price levels but rather something more realistic for the current conditions.

I still have a nagging feeling that the company will struggle to find a partner if IO stays in the 70's. The feasibility study gives a gross margin of $34p/t. This is before shipping which could be around $20p/t. I'm not sure there is enough fat in the project to interest strategic partners with an IO price in the 70's.

Thoughts?