What new managers could do with $95 mil. It interesting to see what could be done with the cash. Here is just one indication of an advanced project from a Canadian company with a market cap of $11 million. At $90 million capital cost it fits the budget. The company could be acquired and the mine built with little debt. The assessment below is based on $900 oz gold and below it shows the impact of $1400 oz gold.
| Scheduled Resources | 806,000 tonnes measured and indicated grading 13.2 gpt Au (after dilution) and 944,000 tonnes inferred grading 11.9 gpt Au (after dilution) and a 9 gpt cutoff |
| Production Rate | 600 tonnes per day |
| Grade | 12.5 grams per tonne (diluted 20%) |
| Recoveries | 91% gold into concentrate |
| Output | 80,000 oz gold per year |
| Mine life | 8 years |
| | |
| The updated preliminary economic parameters are as follows: |
| Gold Price | US$ 900 per oz |
| Exchange Rate | US$ 0.95 = CA$ 1.00 |
| Capital Cost | CA$90.5 million |
| Cash Cost | US$ 383 per oz (excluding off-sites) |
| | |
| Cash Flow (LoM) | Pre-Tax After-Tax
CA $153.6 million CA$103.6 million |
| NPV (5%) | CA$104.9 million CA$ 68.6 million |
| NPV (8%) | CA$ 83.2 million CA$ 52.9 million |
| NPV (10%) | CA$ 71.0 million CA$ 44.1 million |
| | |
| | Pre-Tax After Tax |
| Internal Rate of Return | 32.0% 25.8% |
| Payback Period | 2.6 years 2.7 years |
In the new base case preliminary economic model, higher gold prices appear to have a significant positive impact on the New Polaris gold mine project economics. Using new parameters for the gold price ($US 1,400 per oz), $CA /$US exchange rate (1.00) and cash costs (US$481 per oz), the updated Moose Mountain PEA generates a discounted (5%) after-tax Net Present Value ("NPV") of CA$195 million with an after-tax Internal Rate of Return ("IRR") of 42.8% and a 1.9 year pay-back period. On a pre-tax basis, the undiscounted life-of-mine cash flow totals $272 million.
Mining