OTCQX:BGMZF - Post by User
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GoldExecuteon Dec 14, 2013 10:40am
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Post# 22006116
New Gold / Black Water
New Gold / Black Water New Gold just released the Feasibility study on Blackwater:
Base case economics - at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ foreign exchange rate, Blackwater has a pre-tax 5% net present value ("NPV") of $991 million, an internal rate of return ("IRR") of 11.3% and a payback period of 6.2 year - See more at: https://www.newgold.com/investors/NewGoldNews/PressReleaseDetail/2013/New-Gold-Announces-Blackwater-Feasibility-Study-Results/default.aspx#sthash.Encl1moh.dpuf
Please note, they did not provide an after tax IRR and had all kinds of caveots with regards to taxs.
At $1300 gold with only an 11% IRR (without tax) I wouldn't expect this to get any $ to move forward from any bank. It will take a much higher price in gold to commit to putting something like this in production IMO.
As stated in press release, they will keep moving forward with permitting....
The upside as I see it with regards to the industry and the price of gold is that this will be just another deposit that sits on the side lines and doesn't contribute to world production that just continues to fall off.
I myself always look for the price of gold to only really move when this demand supply issue goes critical, and with many of the majors cutting back or even shutting down, it is only a matter of time.