Pilbara Playbook, page-2

I question some of his mining cost assumptions on DEG's structural gold. I doubt it will cost $ 737 USD per ounce in cash costs of mining. I think that is way conservative. Although nice to have someone independent say value of share is already covered by the structural resource and effectively any conglom resource is all crème at current MC and valuation.

Couple of inconsistencies in approach I spotted.....on slide 17 they value Beaton's creek using 496 K oz which is the measured, inferred and indicated total resource. Roll forward to DEG's valuation on slide 21 where these resources total just over a million ounces but they are using only 323 K in their model ? Why ? Surely you would be consistent ?

Also given on slide 17, mine and processing costs for beatons is AUD 27.50 per tonne, DEG is estimated at AUD 24.50 (less by 11%) . DEG has $ 15 M less in capital costs for mine ($108 M vs $123M). Deg does has lower head grade at 2.1 g/t versus beatons of 2.6 g/t by 24% which will raise costs. However given all these factors combined hard to understand how then the models come up with DEG's cash cost to mine per ounce estimated at $ 738 vs beatons $ 371 (almost double - 99 % higher ). Given similarity in estimated costs per tonne and allowing for lowering headgrade one might expect say DEG's to be 25-30 % higher not almost 100 % higher . With respect I submit there is some hidden other factor factor added into the Deg model to make it look less attractive. Would welcome comments from mining engineers on these inconsistencies in approach ?