redback...reserve ann due soon., page-12

Fair comment Nickoo however projecting gold prices 25% and 50% higher than current prices is purely 'working the numbers'. (Dotcomers were very good at this yes?) Curious how only the upside is tested in this way and not the downside? I think you will find that a gold project BFS will work on a lower price than the current price as gold price volatility and conservatism has to be taken into account.

Copper projects typically use a long range forecast based on the world economy therefore the price may be higher than current market price. However forecasting of gold is not accepted with the same "reliability" and something less than the current gold prices is typically utilised. It is rare to find an investment bank gold price forecast much higher than current price. Perhaps this is linked to the lack of transparency in the gold market, which leads to very difficult price forecasting.

A second comment is that the NPV is typically calculated post capital. Quoting of pre-capital NPV's is never seen in the industry - this is perhaps because mining projects have a defined mine life, hence writing off capital in the evaluation is somewhat mandatory. Perhaps may be different if you were building a factory or property? (I personally dont believe so, but wonder why you have chosen to quote a pre-capital NPV)

I am speaking from my experience in the industry and would be interested to hear other comments.

As a final comment it is easy to justify buying RBK without 'working the numbers'.

acturtle