Ann: Quarterly Activities Report, page-95

Tropicana is at least a beautiful resource, if not Tier 1.

The ore reserve grades aren't spectacular on face value. It is the overall size of the resource which makes it standout. There is still considerable room for discovery and expansion there, as RRL noted at the 2021 Denver Gold Forum.




The interesting point about the Tropicana JV tenements, is that the grades increase markedly the deeper they drill. It is still untested at depth at all tenements. A mining Company's P/E is often majorly to do with its LOM. If the Tropicana JV was judged as a stand alone Company producing 500,000ozpa with AISCs of A$1,179, it would not be unreasonable to command a MC well in excess of A$3b (which is effectively 100% of the price RRL paid for its 30% interest).

For reference sake, NST has a MC over A$11b and produce 1.6mozpa with AISCs averaging A$1,550. To reiterate for emphasis sake, that's A$1,179 versus A$1,550. So at the current OzPOG of A$2,456, NST is making A$906 profit per ounce compared to Tropicana making A$1,277 profit per ounce.

Theoretically at least, relative to NST, Tropicana's notional MC is A$4.845b (11b x 0.5/1.6 x 1,277/906). The RRL MC is justified by Tropicana alone ... and it only accounts for one quarter of annual Gold production.

Its upramping I know ... but I'm only applying the same latitude as the downramper who started this enterprise value in reserve oz terms. Taking the average between upramper and downramper and you still end up with a value for Tropicana well in excess of A$3b, I reckon.

I would expect rising Tropicana AISCs costs will be mitigated by rising ore grades accessed.