Slate Grocery REIT T.SGR

RE: APRIL GOLD SALE

[marketminer]

I seam to recall that the production costs would be $345/ oz Taylor had $328 cash costs estimate. I don't lnow where you got $285 from.... even at 345 Howe indicates robust profit margin,,,, if the grades are more robust that margin will increase significantly... Incidently I also seam to remember you indicating I was a turnip last year for suggesting that grades such as indicated in the 93 and 98 veins would boost average grade. You look more like a turnip now gobbler....JMHO From Latest Howe report Pg 45: "The project has a 5-year mine life based on the reserves plus measured and indicated resources. Because the project is not exposed to large startup capital requirements and there is minimal ongoing development capital required to exploit the established reserves, the breakeven gold price for recovery of capital over the life of the mineral reserves and measured and indicated resources is US$345 per ounce. Over the 5 year mine life the project will generate $65 million in cash surplus after taxes and earnings before income tax, depreciation and amortization (EBITDA) of $94 million (average EBITDA approximately $19 million per year). 10.11 PAYBACK Basically the project is fully paid back at this time as the acquisition costs and costs to bring the project to the production stage have been paid for fully and are basically sunk costs funded by equity financings and convertible debentures. Projected future capital expenditures (see Table 10.1) are funded by cashflow from operations. The project has positive cash flow from operations at gold prices in excess of US$335 and at current gold prices in excess of $US600 the project will have cash surplus after taxes of approximately $68 million dollars over the 5 year life of the existing reserves plus measured and indicated resources, 10.12 MINE LIFE The project has a mine life of 5 years based on proven plus probable reserves and measured plus indicated resources. In Howe’s opinion, given the current inventory of approximately 3.7 million tons of inferred resources and the long operating history of the Rice Lake Project, it is probable that sufficient inferred resources will be converted to resources to achieve a minimum of 10 years of mine life. Mineral resources that are not mineral reserves do not have demonstrated economic viability and there is no certainty that the results of the economic analysis will be realized.