Just having a look at the original IAU feasibility study from...

Just having a look at the original IAU feasibility study from March 2007 here. It indicates an internal rate of return of 15% @ $US500/oz gold price, rising to 40% @$US650/oz gold price. With a $US500/oz gold price, annual free cashflow was to have been $US14m p.a. Imagine what the IRR is @$US950/oz!

The total resource stood at 314Koz at the time of the feasibility study. Now, it's over 450Koz, with the results of 13,000m of drilling yet to be incorporated into a new resource model. [Note that this was exploration extentional drilling, so it's intention was to expand the overall resource, rather than to firm up the existing resource. Consequently, we can reasonably expect the total resource to exceed 500Koz shortly.]

From Intrepid's 13 October 2008 progress report:-

"Given the dramatic impact of financial market turmoil on the availability of funds – with debt availability uncertain and equity markets effectively closed - the Company has taken the decision to postpone construction of the Casposo Project at this stage, notwithstanding some of the best gold and silver intersections in current extension drilling being received."

IAU also had the company which originally prepared the feasibility report update it in early 2008. Although they did not release updated project economics, IRR or potential free cashflow, it provides some useful information:-

As previously reported on 27 May 2008, Intrepid Mines Limited (TSX:IAU)(TSX:IXN)(ASX:IAU) ("Intrepid") engaged AMEC to review the Casposo Project ("Casposo") Feasibility Study of March 2007 (ref: www.sedar.com). The review is based upon an updated Total Indicated Resource (June 2008 at $760 gold and $13.00 silver) from the Kamila and Mercado deposits containing 2.1Mt grading 5.07 g/t gold and 136 g/t silver (6.81 g/t gold equivalent) indicating contained metal of 454,874 equivalent ounces of gold. This translates into a Probable Reserve (June 2008 at $690 gold and $11.80 silver) estimated to be 1.7Mt at a grade of 5.16 g/t gold and 120 g/t silver (6.86 g/t gold equivalent) which equates to in-situ mineable material of 382,535 equivalent ounces of gold. This compares to a previously announced Probable Reserve of 1.8Mt at a grade of 4.69 g/t gold and 113.8 g/t silver (6.11 g/t gold equivalent) for 351,935 equivalent ounces of gold. The new ore Reserve is based upon applying an annual production rate of 63,000oz gold equivalent over the current 5.5 year mine life.

The AMEC review provides for a capital cost estimate at US$86 million (June 2008 dollars). Intrepid have decided on a development timetable that allows for commencement of production in the third quarter of 2010. The capital cost increase is consistent with current industry experience since March 2007. The average life-of-mine operating cost was also reviewed and confirms a gold cash cost of production at $90 per ounce (after allowance for silver credits at US$14 per ounce).

All this, for $US22m? A bargain!