approval and producing at $400 an ounce, page-41

Hi speculator101,

KGL pulled out of savoyarday after they obtained Andash and needed their capital to get into production. Ironically, Andash isn't up yet and their investment would have paid off so it is to our benefit that we own 100% of it now.

When the scoping study was done, cash costs were estimated to be around 250$. Capex and cash cost have been reviewed higher for a couple of reasons. One is due to the increase of scale from 30000oz to 53000oz/year and inclusion of lowergrade/sulphide material. Plant was upgraded from 200000tpa to 600000tpa++ enabling us to process at a peak of 68000oz/year. This is the right move as NPV has more than doubled while cashcost and capex have only increased by less than 50%. The 2nd reason is because this is a DFS so estimated inflation, mining dilution wage increases and environmental bonds need to be added in.

It is quite amazing our scoping study was done on 1000$ gold assumption if i remember correctly.


Anyway PRU has a 24% stake and they are cashed up with a lot more rolling in over the next 2 years. Very unlikely they would see their investment fail. Drilling will be on-going regardless but on a smaller scale.

Certainly one to hold long term. At 1700$ gold, average profit is 50m/year. I really think i am on a 5-bagger here and this is based on no additional drilling. Just based on Shambesai getting online at PE of 3.