[MEDIA] Analyst Comment: This was an opportunistic acquisition...

Analyst Comment: This was an opportunistic acquisition for Primary, as it allows the company to enter the ranks of gold production by 2017 and take advantage of the record high Australia gold price. Critically the cash flow generated from Coolgardie (+$40m – TSI estimate) will be used towards the development of Mt Bundy, therefore significantly reducing future dilution.  Mt Bundy remains the long term valuation driver for the company as it is one of the few remaining gold development assets in Australia that has the potential to produce more than 150koz pa. 

We have estimated that Coolgardie will initially be mined as an open pit operation with production between 45koz – 60koz pa at an AISC of $1,183/oz (TSI estimate).  With a low initial capital cost requirement ($7m – TSI estimate) due to historical mine development as well as three toll treatment facilities with 8km of the project, we see this as a relatively low risk opportunity for the company to become a gold producer. 

We look forward to drilling commencing at both projects as well as further information regarding timing on the commencement of gold production at Coolgardie in the coming months.

Valuation:  This acquisition has resulted in our valuation increasing to $0.42 / share  (previous $0.30 / share).  The increase was driven by the additional value from Coolgardie, as well reducing future dilution, due to cash flow generated from Coolgardie prior to the development of Mt Bundy.