questions and answers

Hi Guys,

Yesterday I posted a series of questions that required further investigation. As a result I have decided to start a new thread where I can share my answers.

Problem One:

Total production over LOM was stated as 248,900 oz.

Average production p.a. was stated as 50,000 oz. 50,000 oz x 6 (LOM) = 300,000 which is greater than the total amount of production/known reserves.

Furthermore, using the production figures also equated to:

I have Year 1 as 270,000 tpa @ 5.1 g/t Avg / 31.1034768 (troy ounce) = 44,271 oz x recovery rate of 95.7% = 42,367oz

Years 2,3,4,5,6 = 333,000 tpa @ 5.1 g/t Avg / 31.1034768 (troy ounce) = 54,109 oz x recovery rate of 95.7% = 51,782

Total Year 1 = 42,367
Total (Yr 2-6) = 258,910
TOTAL = 301,277

Obviously there is a discrepancy somewhere.

The Answer:

I believe the average of 50k oz has been taken from the figures on page 2 of the feasibility that says the annual range will be between 36,000 oz and 65,000 oz.

36 + 65 = 101/ 2 = 50.5 avg

Howver, to stay within the total production (LOM) of 248,900. I have plugged in the following figures:

Year 1 = 35k oz
Year 2-6 = 42,780 oz
TOTAL = 248,900

This also allows my own DFC to matchs CRC's figures for NPV, Net margin, etc. As a result I know the figures stated above must be what CRC is using in their feaso (give or take a few oz).

Obviously this means that the average production rate will not be 50k BASED ON THE FEASO only.

It is however important to note that the processing capacity of 330,000 tpa, grade of 5.12 and recovery of 95.70% would allow for 51,986 oz to be mined each year.

Therefore the plant has the capacity to achieve 50k oz if additional resources are identified.

In summary:

I believe it was incorrect to say avg production will be 50k oz, when in fact it will 41,483 (248,900/6). You must remember than the DFS is based on the known resources/reserves at the time, not what could be found in the future.

However has luck would have it 50k is actually achievement given the plants capacity and if additional reserves can be identified.

I hope that all makes sense. But please feel free to ask any questions as it has taken a fair amount of work to determine the above.