Some findings from a DCF projection for all the Minyari-WACA...

Some findings from a DCF projection for all the Minyari-WACA depositsamenable to open pit mining I worked on recently.

It is showing an NPV8 valuation of USD 331m equivalent to AUD 467m. Reducingby 20% as a precaution still leaves AUD 374m, well over twice the currentmarket cap.

Based on up front capex of US$125m in 2023 to construct own plant,unsealed access road, camp and other start-up costs

24 months to first production, ramping up from 3mt in 2025 to 4mt from2026–2029 and finally 2mt in 2030.

The assumed POG was $1,750, 10% finance costs, 8% discount factor, costsof US$40 per tonne, covering mining, processing, site admin, refining, royaltiesand selling costs etc

With other costs added, including ongoing Minyari area explorationcosts, taxation ($125m), HQ Admin etc.

The quantity of gold is a modest 806K ozs, but 3 other factors come intoplay. It is 100% owned, open pit mining is cheaper than underground and theby-product credits are very considerable, as per the table on page 11 of the Minyariupdate of 2 May.

Taking the data in that table at face value, by-product credits willaverage 47% of gold revenues.

This is about 2.5 times as good as the recently updated MRE produced byGGP for Havieron, providing grades and metal prices hold up of course –especially for Cobalt

An assumed recovery rate of 85% was applied to all production. After allthat it seems like the AISC costs are borderline negative, so I am almosttempted to ask is it all too good to be true?

However given the considerable amount of drilling already done, with themajority of the 1m oz of indicated gold being within 300m of surface and the highergrade resource suitable for underground mining which I have not included, I aminclined to believe that the NPV estimate should hold up.

But of course it is an estimate so no investmentadvice intended