Kalkaroo Copper Project Peer Comparison, page-36

Kalkaroo Project Peer Comparison (Undeveloped Australian Projects, Ore Reserves, PFS or FS)

Continuing to focus on separating Havilah from the mining junior pack by articulating why Havilah has the best risk-reward equation, I have used Havilah's flagship Kalkaroo project alongside KGL Resource Limited’s (ASX: KGL) only project, the Jervois copper project, for the first undeveloped Australian copper peer comparison.

The table below shows a copper peer comparison of Havilah's 18 June 2019 Kalkaroo copper-gold project PFS (revised for the Havilah 2 December 2020 ASX Media Release new LT metal prices) with the Jervois copper project PFS (KGL ASX announcement of 2 December 2020).

The Jervois copper project is a high-grade deposit (9.4 Mt @ 2.41% Cu ore reserve) in the Northern Territory. During January 2021, the Jervois Mining Management Plan was approved by the Northern Territory government. The PFS assumes the concentrate will be transported by road to Alice Springs (a distance of 380 km) and then railed to Adelaide for export. Options of alternative exporting ports, including Darwin, will be investigated as part of a Feasibility Study.

Notes:
KGL has no other JORC Mineral Resources or mineral deposits. It has a number of other exploration licences in the Northern Territory, some with mineral prospects.

Jervois copper project pre-production capital is stated as A$200 million (US$142 million). Project financing has not been sorted.

KGL currently has approximately A$126 million in tax losses available.

Cash on the KGL balance sheet at 31 December 2020 was A$5.2 million (estimated 4.8 quarters of funding available).

Yet the current KGL market capitalisation is A$121 million.

Substantial shareholders (there were 4 shareholders, including the KGL Executive Chairman with 9.7%) held 51.73% of the KGL share register at 20 March 2020. Top 20 shareholders held 75.78% of the KGL ordinary shares.

	Column 1	Column 2	Column 3
0		Kalkaroo Copper-Gold Project (South Australia)​	Jervois Copper Project (Northern Territory)​
1	Company​	Havilah Resources Limited​	KGL Resources Limited​
2	Ownership of project​	100%​	100%​
3	Status​	PFS published 18 June 2019; Mining Leases granted; ownership of land on which project is located is via Kalkaroo pastoral lease; Native Title Mining Agreement in place; PEPR not yet granted​	Mining Leases in place (including a standalone lease covering groundwater bores); Environmental Impact Statement approved; Native Title Agreement in place; Mining Management Plan approved ​
4	Pre-tax NPV ​	A$903 million​	A$177 million​
5	Discount rate​	7.5% (2019 real)​	8% (2020 real)​
6	A$/US$ exchange rate​	0.75​	0.71​
7	Copper price (long-term)​	US$3.10/lb​	US$3.08/lb​
8	Silver price (long-term)​	-​	US$22.80/oz​
9	Gold price (long-term)​	US$1,500/oz​	US$1,850/oz​
10	IRR​	26% (based on original PFS long-term copper price of US$2.89/lb and gold price US$1,200/oz)​	23%​
11	JORC Ore Reserve​	474,000 copper tonnes; 1.4 million gold ounces. 90% in 'Proved'; 10% in 'Probable' classification​	226,000 copper tonnes; 9.6 million silver ounces; 113,000 gold ounces. 100% in 'Probable' classification​
12	Mining method​	Open pit​	Open pit/ Underground​
13	Copper cut-off grade​	Saprolite gold resources 0.2 g/t gold cut-off grade, while for the main Kalkaroo copper-gold resource a 0.4% CuEq cut-off grade​	Open pit: 0.5% copper cut-off grade;​ Underground: 1.0% copper cut-off grade​
14	Average production (as recovered metal) anticipated​	Approximately 30,000 tonnes copper and 72,000 ounces gold p.a.​	Approximately 30,000 tonnes copper; 893,000 ounces silver; 8,600 ounces gold p.a.​
15	Life of mine (processing)​	Minimum 13 years​	Initial 7.5 years​
16	Waste: Ore ratio (including pre-strip)​	3.5:1​	4.9:1​
17	Mine distance to nearest port​	~350 km (road and/or rail) to Port Pirie, South Australia​ ​ 95 km northwest of Broken Hill; 50 km from railway by road​	~1,700 km by (road and rail) to Port of Adelaide​ ​ 380 km by road from Alice Springs and railway ​ ​

Sources for above table:
Kalkaroo https://www.asx.com.au/asxpdf/20190618/pdf/445xm614yw5s9f.pdf

Jervois
https://www.kglresources.com.au/projects/2-jervois-base-metal/docs/20201202%20KGL%20Resources%20PFS%20Annoucement%20and%20Exec%20Summary.pdf


Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.