Ann: Underground Scoping Study Gives Confidence to Proceed, page-2

There is something strange going on. Unfortunately it seems to occur when EQR makes an announcement. Someone comes in an pushes the price down.

Putting that to the side for a moment. The updated scoping study does have good news in it.

The current BFS allowed for a project of 12 years with tonnage coming from stockpile 12m and Open Pit 1.1m. Giving a NPV of $131m, IRR 154% and ONLY 14.4% of known reserve. The open pit makes up 2-3 years of the 12 years with the rest coming from the stockpile. BUT in the production diagram (see chart below) it allows for additional resource of a higher grade than the stock pile to be used from year 4 to 12. The cashflow from this extra resource ISN'T IN THE NPV or IRR

This scoping study of the underground fills the gap. They have announced 2.4mt @ 1.05% of UG. It suggests they will be building up 1500t per day which is about 500k t per year. This means the underground will provide at least 6 to 8 years of production which will be added to the BFS gap.

The capex is unlikely to increase much and the grade is better than the stockpile, so the cashflow (NPV will rise dramatically).

They are also waiting on drilling of the Western area which is likely to add further years to the open pit or UG. This means they will extend the life of the mine or reduce the amount of low grade stockpile taken.

Either which way, project is worth more $$.


Pictures on linkedin show the start of construction of the Sandvik gear. This is part of the 1mtpa Plant construction that is part of the timeline.

The 2nd ore sorter is in place. The bigger wet screen is being constructed. Looking forward to higher tonnage each month, especially with the higher price.

Patience is a virtue.