Nyanzaga Project Value

I've been looking at a lot of African mines and feasibility studies of late trying to get a feel for the potential value of the Nyanzaga project. I posted some operating and capital costs of similar mines over on the CDV forum (here).

I've put together an NPV calc based on what I think are a realistic set of assumptions. I've done it in NPV form since the NPV determines the transaction multiples if Acacia elects to keep its 75% interest in the project.

This is all clearly speculation at this point but I think gives a good feel for the project. All values in US dollars unless otherwise noted.

- Based on the M+I resources of 2.3 Moz I have assumed a mining reserve of 2 Moz at a grade of 4.1 g/t.
- Assumed mill throughput is 1.5 Mtpa
- Assumed recovery = 88% (based on reported metallurgy so far)
- Ounces produced per year = 170,000 oz (flat production profile)
- Mine life = 10 years for total gold sales of 1.7 Moz

Based on the study of similar projects in the link above I have assumed a capital intensity of $100/t of mill throughput. The underground development is a bit of a wildcard here but I think $150M upfront capex is fair.

Discount rate 8%.

Below is a chart which shows the NPV at various scenarios of gold price and All-in Sustaining Costs. Given we are still 18-24 months from a possible completion of a DFS the tremendous leverage to the gold price is going to be key.