The Kalkaroo Project provides Havilah shareholders with...

The Kalkaroo Project provides Havilah shareholders with significant leverage to gold and copper prices.

As we all know, the Kalkaroo PFS is based on an open pit JORC Ore Reserve of 474,000 tonnes of copper and 1.41 million ounces of gold.

Per the PFS dated 18 June 2019, at metal prices of copper US$2.89/lb (A$3.86/lb) and gold US$1,200/oz (A$1,600/oz) and (using FX of A$:US$0.75) the Kalkaroo Project generates a pre-tax NPV7.5% (net present value) of A$564 million:



Using these same metal prices, Havilah said the post-tax NPV7.5% of the Kalkaroo Project was A$361 million.

I have prepared a post-tax NPV7.5% matrix (see below) to generate discussion:

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7	Column 8	Column 9	Column 10	Column 11	Column 12	Column 13	Column 14	Column 15
1
2
3
4	Post-tax A$ million NPV7.5% (estimated)	Gold A$/ ounce
5	Copper A$/lb	1,333	1,467	1,600	1,733	1,867	2,001	2,135	2,269	2,403	2,537	2,671	2,805	2,939	3,073
6	3.33	109	153	197	241	285	329	373	417	461	506	550	594	638	682
7	3.60	193	236	280	324	368	412	456	500	545	589	633	677	721	765
8	3.86	273	317	361	405	449	493	537	581	625	669	714	758	802	846
9	4.13	358	403	447	490	534	579	623	667	711	755	799	844	888	932
10	4.40	442	486	529	573	618	662	706	750	794	838	883	927	971	1,015

It is clear the Kalkaroo Project provides Havilah shareholders with significant leverage to current high gold prices.

For example, at the current spot metal prices of gold A$2,551/oz (US$1,744/oz), copper A$3.82/lb (US$2.61/lb) and FX A$:US$0.6834 results in an 85% increase in the post-tax NPV7.5% to ~A$669 million (from A$361 million, PFS base case of gold A$1,600/oz and copper A$3.86/lb).

From this post-tax NPV7.5% matrix, you are free to choose a gold price, copper price and/or FX rate to come up with your own post-tax NPV7.5% for the Kalkaroo Project.

Notes:
1. All tables are reported in Australian dollars.
2. Effective tax rate, I calculated from the PFS, was 36%.
3. The table for the PFS used a 49% recovery for Saprolite Gold ore: ~252,350 ounces of gold. The tables above exclude any improvement from the metallurgical test work which recovered 92% or an additional ~221,450 ounces of gold.
4. For every A$134/oz change in the gold price in the tables, the pre-tax NPV7.5% moves by A$69 million and the post-tax NPV7.5% moves by A$44 million.
5. A significant increase in metal prices will also increase the Kalkaroo Project's Internal Rate of Return ('IRR') from it base case post-tax NPV7.5% of 21% IRR.
6. Spot metal prices sourced from: https://tradingeconomics.com/commodity/copper

Food for thought!

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.