1. NPV jumps a lot. Low grade resources are the most leveraged...

1. NPV jumps a lot. Low grade resources are the most leveraged to gold price changes. NPV would jump even without any changes to the SS2 plan, but they could also do a simple change - adjust the ore sorters to stop rejecting so much ore when the gold price is higher, as lower grades are now profitable. They have the old sensitivities chart in SS2 to show what happens to the NPV if gold rises. But needing to adjust for inflation in costs (OPEX/CAPEX) since then.



2. Sounds like they used $1800 gold price in the NPV calculation, and said each $180/oz increase adds $288m NPV. Easy enough calculation from there, other than adjusting for inflation in other costs. So $2500 would be around 4 multiples of $180 above $1800. So $288*4 ($1.15b) added to the $654M base case NPV. But that ignores cost inflation post-COVID, and higher discount rate since IRs have risen. Overall, it's hard for me to say what the final number would be, since I can't predict the change in costs.

3. Higher gold price would mean quicker and larger payback from North, giving them cash to accelerate the rest of the plan. Eg. bring the sorters forward by 6 months, or build a larger plant. Eg. why have some sorters after 3 years and some after 8 years, if you can buy them after 2 and 5? Just random ideas.


My general feeling was that gold is up, but so are costs. But it depends what timeframe you look at.

This website shows 18% cumulative inflation over 3 years.




Gold is up maybe 2% over that period:



So bad over that 3 years timeframe. But good over the 5 year timeframe seen above, and good on the 10 year timeframe.