Risk on, page-38

P.S.

When I put Arekay's lower grades, lower throughput and lower prices into my spread sheet the annual escalated cost drops to $106m so free cash flow of $32m x 3.25 years = $104m. Which would allow the Cap Ex to be repaid from a third of the free cash flow. That should satisfy a very conservative banker.

Its of course not what would happen.

If prices drop the throughput would drop but the grades would rise not fall.

The cut off grade would be lifted from 0.6% to something like 0.8% and the 400 KT pa that was left behind would have an average grade of circa 0.7%. Which would lift the grade of the 1.1m t that were extracted from 1.17 % to 1.34%. There is good reason also to think they will Instal a Kneelson Separator and lift the Au recovery to 85%.

Based on those numbers my spread sheet at your reduced prices delivers annual revenues of $170m and costs of $113m for free cash flow PA of $57m and total free cash flow from a four year mine life of $185m. Should make for a very happy banker.