Below is an old Exco report added to the thread to provide...

Below is an old Exco report added to the thread to provide further background to the White Dam Project.

White Dam Gold Project - Final Feasibility Study Commenced
May 2005
http://www.asx.com.au/asx/statistics/getAnnPdf('/asx/statistics/showAnnouncementPDF.do?idsID=', '00523759', 'Announcement');return false;

Summary
- Pre-Feasibility study shows robust project economics.
- Recoveries in the range 70%- 80%;
- Project NPV (EBIT, 10%) of A$16-25 million.
- Internal rate of return of 207% - 366%.
- Capital costs estimated at A$5 million plus $2 million working capital.
- Polymetals Mining Services appointed to manage

Feasibility Study.
- Final Feasibility work and permitting underway.

The Company is pleased to announce that the White Dam JV partners have agreed to proceed with final feasibility studies and development planning for the White Dam gold project.

Polymetals will manage the final feasibility study and have assigned a project management team. Polymetals is a privately owned mining company with operations in New South Wales and Western Australia. Polymetals have operated the Mt Boppy Gold Mine near Cobar in NSW since April 2002 producing 50,000 oz to date and also operate the Nimbus Silver mine near Kalgoorlie in WA which was commissioned in April 2004 and has produced 1.7M oz of silver to date.

The current financial model for the project has incorporated a range of cost increases for capital and operating costs, in line with recent industry rises since the scoping study financials was reported last September.

The project remains robust with NPV before tax and interest (EBIT) of between A$16 to $25 million for the recovery ranges of 70 to 80%.

Whilst the metallurgical test work has consistently indicated column leach recoveries of around 80% or better for crushed ores the JV partners have decided to use more conservative assumptions for heap recoveries of 70% to 80% for our modelling.

There is considerable upside in the project if the higher recoveries are achieved.

Further upside in the project may also be realised through the addition of new resources, with an additional 1 million tonnes of similar style ores increasing the project NPV by around $10 million. Based on the excellent results from drilling at the White Dam North and Vertigo prospect last year we are confident that further work on these areas will add to the resource base.

The final feasibility studies and development permitting are being progressed as rapidly as possible, with completion scheduled for early August 2005. Subject to final native title and landowner agreements the construction would be completed in late 2005 and commissioning and production scheduled for 1st Qtr 2006.

Please see the company website for a presentation summary summarising key aspects of the project. A detailed project update is provided below.

Resources
A JORC resource report was completed and reported in September last year, as outlined below;

Indicated and inferred resources - 7.4 m tonnes at 1.09 g/t for 258,600 ounces.

Includes Oxide resources (top 30m) - 5.5 m tonnes at 1.12 g/t for 199,800 ounces.

Metallurgical Studies

Independent Metallurgical Laboratories in Perth have completed column leach tests and leach characterisation testwork. The latest results are consistent with earlier tests and show recoveries in the range of 70%-80%.

The recent tests were conducted using bulk samples from costeans that were leached in large scale columns at IML Laboratories in Perth. Additional leach variability and characterisation work was conducted by bottle roll leach tests on crushed core samples collected in the recent geotechnical and metallurgical drilling program, using representative samples taken from core holes located throughout the ore body.

A final review of the recent work is being completed by Kappes Cassiday & Associates.

Geotechnical studies

Physical property test work and geotechnical logging has been completed by Dempers & Seymour.

Mining Studies

Initial pit optimisation modelling has been completed with the current open pit resource shown below;

4.3 million tonnes @ 1.28 g/t gold Strip ratio ore : waste volume 1:1.46

Native Title and Landholder Agreements (SBC NOTE: NATIVE TITLE IS NOW GRANTED)

The Company is currently in the final stages of negotiation with the Adnyamanthanha People and the landholders in respect of the mining lease application for the White Dam deposit and the Company has lodged with PIRSA its draft proposal for mining and rehabilitation programme.

Hydrology

The increased throughput to 2 Mpta has increased the water requirement and additional drilling and groundwater evaluation will be required. This work is underway.

Financial Modelling (REFER TO STRACHAN REPORT FOR MORE UP TO DATE BROKER ANALYSIS)

More detailed cost estimation for plant, equipment and infrastructure has increased the capital cost estimate to $5 million. Working capital, primarily mining costs prior to cash flow, is estimated at $2 million. Mining costs have been increased to allow for recent price increases, particularly fuel and an increase in the pit volume.

Processing costs have been reduced due to a decision to owner operate the crusher as opposed to contract crushing. Capital has increased accordingly.

With the increased capital and using the conservative end of the recovery range the project shows an NPV (EBIT) of $16 million, increasing to $25 million at 80% recoveries.

Sensitivities

The key sensitivities are gold price, grade and recovery. The focus of work to date has been to establish confidence in the recoveries and resource grade through the program of leach and variability tests and the detailed drilling and modelling of the resource. The Company is confident that the parameters used in the modelling are well supported by the work conducted to date.

Parameters and Assumptions

The key parameters and assumptions related to the project results as reported are as follows:

- The pre-feasibility study utilises an approximation to the spot or current market prices for gold, Australian dollar, fuel and cyanide.
- The resource estimate is JORC compliant.
- Completion of the Final Feasibility Study will result in a JORC compliant Ore Reserve.
- Metallurgical recoveries and leaching rates utilised are at the conservative end of the range indicated by the current test work.
- The capital and operating costs are derived from historical data, budget pricing and formal quotes.
- Labour costs have been derived from experience at Polymetals’ Mt Boppy and Nimbus operations, historical data and industry surveys.
- Contingencies of 10% of capital cost have been included.
- All financial projections are before interest and tax.

Exploration

Potential for additional resources at White Dam North and Vertigo has been identified from previous drilling.

Further work is being planned to evaluate the metallurgy and tonnage potential of these prospects with drilling planned in the second half of this year.