npv of karara project, page-4

Yo Mvp,

There are several reasons:
- discount rates
- mine life
- iron ore price assumptions
- currency assumptions
- tax & depreciation assumptions
- production rate assumptions
- production timetable

You can tinker with all these things to give you whatever value you want. ARH use a discount rate of 8%, which for a mining company is quite low. Should be at least 10-12% until a lot of the risks are eliminated / reduced.

GBG's NPV is higher than $2.2b - much higher - if you use the ARH assumptions.

TheGimp