Market fluctuations of the magnitude we have witnessed over the past few days are always cause for reflection. During these periods, I believe it’s important for every management team to take a step back and evaluate their strategies and objectives. That said, the current market situation has not altered our intention to advance the Tepal project towards production. While these markets do mandate caution, our confidence in Tepal is bolstered by the relatively low risk attached to the project. Our recent prefeasibility study suggests that Tepal will feature excellent pretax cash flows of $942 million, an IRR of 36%, and a reasonable capital cost relative to its gold equivalent metal production of 2.5 million ounces. Knowing that we have this highly engineered, measurable and tangible asset in a secure jurisdiction gives us comfort in our ability to not only weather this temporary tempest, but also reward our shareholders with significant value in the future.
It’s also worthwhile to note that turbulent markets also create opportunities for those with a long-term approach to value creation. Tepal serves as an example of this – we acquired the project during 2009, another period in which markets were suffering under considerable uncertainty. While Tepal’s development remains our primary focus, we do possess an accomplished internal team that is constantly evaluating potential projects.
Sincerely
Dunham Craig, Geologix Explorations