Interesting that Toll treatment is being considered, managment...

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Barolobill

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189

09/03/18

14:22

Post #: 31648039
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Originally posted by Davisite ↑

Lots of very interesting information in here, but I thought I would focus on the bull case.

Scenario Analysis – Expanded Project
In the context of the Company confirming the broader prospectivity of the Project and to gain a better understanding of its potential value, we have evaluated a bull case scenario that envisages an expanded plant (1.5x that of our base case) and gold production of 100koz p.a. over 10 years. This implies a mineable resource of ca. 1Moz which is within the limits of our estimated exploration target. Table 8 summarise our bull case scenario for the Rothsay Gold Mine. It can be seen that substantial value is unlocked in the Project under an expanded production scenario. Our un-risked, DCF valuation generates a post-tax NPV8 of A$187.3m or A$1.21/share (assuming 155.3m ordinary shares). The plant expansion contemplated in our bull case scenario is fully funded by cashflow generated by the base case scenario and generates EBITDA of A$76.7m and FCF of A$39.8m at full production (TCLe).

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Interesting that Toll treatment is being considered, managment haven't mentioned that in any announcements. The benefit is much lower capex and faster production, negative is giving away some margin, but with POG hovering around AUD$1700 and an estimated AISC below $1000 ($980), this could be absorbed. Interesting.

EGA Price at posting: 26.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

1 Great analysis

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