RE:Yikes, what happens when project not feasible.wow, reading ITH FS shows that it's even worse than VTR in terms of deposit grades, NPV, IRR, CapEx....... only 0.5g/t?! No wonder the economics is so terrible in current gold prices environment.... IRR only 14% at POG $2,000/oz..... NPV and IRR are negative even at POG $1,600/oz?!
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Gold price sensitivity analysis
An attached table shows the after-tax economics at various gold prices
Gold price ($/ounce) NPV 5% ($M) IRR (%) Payback (years)
$1,200 $(1,835) -16.1 N/A
$1,300 (1,336) -7.2 N/A
$1,400 (854) -1.9 N/A
$1,500 (440) 1.7 10.8
$1,600 (50) 4.6 8.8
$1,700 336 7.3 7.2
$1,800 723 9.7 6.1
$1,900 1,109 12.0 5.2
$2,000 1,493 14.1 4.6
$2,100 1,869 16.1 4.2
$2,200 2,219 17.8 3.8
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Kiaka is much more robust than Livengood. At POG $1372/oz, VTR IRR is at 23% already...... Imagine POG at $1500, $1700 or $2000/oz....... And yet, market cap of ITH is double of VTR's..... crazy insane people in the market?!
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Hence management is wise to conserve capital in current POG environment by suspending current approach to Kiaka and trying other options........ no point to fight with insane people in the market.
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GLTA