things that go boom, page-30

Yurt head,

IF the capex was to be funded by CR only (highly unlikely IMO) then you would be looking at an additional 1.5m shares on issue (using 7c as a ballpark) or 2.5m shares in total.

However the $100 mil. capex won't be an issue nor entirely CR funded IMO.

IMO the financing will come either via traditional debt funding, a stream/royalty transaction (similar to that recently announced between TGZ and Franco Nevada), perhaps another placement (inc. maybe a small CR for retail investors), but quite likely a combination of some or all of the above.

I wrote the below on another forum yesterday to illustrate the very likely robust economics of this project, even if the adit disappoints. The big end of town investors already know this IMO (they are smarter than me) and therefore I'd be very surprised if the relatively small capex ends up being the hurdle that sends IDC crashing to its knees.

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I wrote yesterday;

As a long term investor, I prefer to leave no stone unturned and therefore keen to discuss worst case scenarios.

Firstly, let' assume that IDC finalise funding for the next 6-9 months soon.

Sidenote: I like the potential debt funding option as a means to finance the underground drilling & development phase because it
a) prevents further dilution to the register.
b) provides immediate financial guarantee on a greater scale than previous placements and ensures that the adit and targeted drilling can be completed without further delay
c) potential loan of say $20 mil is IMO immaterial in the grand scheme of things, as I will attempt to illustrate below.

Secondly, let's assume the adit 'disappoints' (at least initially) and they only come up with half of what they're targeting in the next 6-9 months. i.e. an additional 250koz at 10g/t (750koz total) by October 2014 at the latest.

Well IMO that's still a solid initial resource to commence production, using the below equation as a guide.

150koz p.a. x 5 years at say A$700 all in cost (including silver credits) still provides a very healthy profit of $405 mil. over initial LOM (before tax)

To illustrate potential profit in terms of gross margin less capex;
A$700 margin using current A$1400 POG x 750koz = A$525 mil margin.
Less $100 mil targeted capex + $20 mil. development loan = $405 mil. profit before tax.

So IMO the initial high grade resource (whether that be 700koz, 800koz or 1mil oz at 10g/t) will not have any material impact on the decision whether to mine, as either of these scenarios suggest it's a no brainer IMO.

Finally and most importantly IMO, the initial resource at 10g/t (once determined) does not include additional targets that have been identified by Tony Burgess and more recently by Dr. Norman in his study.

Therefore regardless of the 'starting gate' projections for 2015 production, the vast potential for further high grade discoveries could mean a high grade LOM far in excess of our current understanding.

And that is the most enticing aspect of this project IMO.

Cheers and very best regards,
Elpha

Note: my opinion and analysis are mine only and in no way am I offering advice of any kind. Please DYOR.