Below are the IRR figures etc as stated in the March Quarterly 2011. There is a substantial difference compared to what vainglorious is claiming and I would tend to go with the proven experts.
Touquoy Feasibility Study (resource 454,000 contained gold ounces) Since the DFS was completed there have been substantial positive movements in currency exchange rates and gold price. The currency exchange rate used for the study - A$/C$ of 0.90 - has markedly improved to 1.04 at present, and the gold price has increased from US$1100/oz to more than US$1500/oz. These movements effect a decrease of initial capital requirement from A$136 Million to A$118 Million and an increase in NPV (8%, ungeared, pre-tax) from A$88 million to A$152 million, IRR (ungeared, pre-tax) has increased from 32% to 50% and net cash surplus (ungeared, pre-tax) from A164 million (C$147 Million) to A$250 million, as per the company announcement in the March Quarterly dated 29/4/11.
Also the payback is less than 2.5 years at current gold price.
Ultimately the most important consideration is the profitability of the project and this project is very profitable.
It should also be noted that the plant will be utilised after Touquoy on the Cochrane Hill deposit.
OVER 900,000 oz IN-PIT POTENTIAL FOR COMBINED NOVA SCOTIA GOLD PROJECTS - TOUQUOY AND COCHRANE HILL INDICATIVE FINANCIALS 100% Basis Gold price US$1100/oz Net cash surplus $315M Project NPV (8%, ungeared, pre-tax) $146M
If you add US$400 per oz to above combined projects figure re the cash surplus that would add another US$360M, that gives you an indication of serious profits to be made from these 2 projects at current gold price.
ATV Price at posting:
4.8¢ Sentiment: Buy Disclosure: Held
