1 a hands on modelling start here overview 2013-10-06

7/24/2019 1 a Hands on Modelling Start Here Overview 2013-10-06

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1a. Hands On Modelling

Start here Overview

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Spend only a few seconds on most slides.

2


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Level 3: Decision making

Level 2: Evaluating the business/project

Level 1: Hands-on economic modelling

3

give a quick

overview of


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Modelling is as easy as A B C

A.

Three levels of evaluation

i. Decision Makingii. Evaluating

iii. Hands-on modellingB. Three Layouts:

i. A simple assessmentii. Comparing alternativesiii. One long detailed complex model

C. Hands-on modelling practices

i. Six principlesii. Four cashstreamsiii. Worked examplesiv. What people want!

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.


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Selecting the alternative for the project/activity that bestfits the total business; by using the results gleaned fromthe evaluation work in Level 2




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Level 3: Decision makingSelecting the alternative for the project/activity that bestfits the total business; by using the results gleaned fromthe evaluation work in Level 2



This is the

most important

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Level 2: Evaluating the the business/project

Using hands-on modelling to understand values,drivers, ranges, high & low possibilities, alternatives,options, flexibility, industry cost curve much morethan NPV



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Level 2: Evaluating the the business/project

Using hands-on modelling to understand values,drivers, ranges, high & low possibilities, alternatives,options, flexibility, industry cost curve much morethan NPV


This is the most

challenging and

productive

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Using rigorous modelling practices, to create an easy-to-understand, transparent, robust and audited working tool

.


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Using rigorous modelling practices, to create an easy-to-understand, transparent, robust and audited working tool

NPV, IRR payback are just a few of the outcomes

Your model may become long and detailed but must

always remain easy for others to follow.

.


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Using rigorous modelling practices to create an easy-to-

understand, transparent, robust and audited working tool

NPV, IRR & payback are just a few of the outcomes

Your model may become long and detailed but

must always remain easy for others to follow.

.

This is the

workhorse


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Your task is to develop a model that anyonearound you can understand rapidly.

It may become long detailed and complex but it must remain easy for others to follow.


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Your task is to develop a model that anyonearound you can understand rapidly . Others must be able to confidently play with their copy.

That is how you measure your success


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Your task is to develop a model that anyonearound you can rapidly understand.

If your model is sophisticated and smart so that you

and only a couple of others can easily use it, then it is

1990s era, poor quality product


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i. A simple assessment

ii. Comparing alternatives

iii. One long, detailed, complex evaluation


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such as

Day-to-day activities

Preliminary assessments

Concept studies

the workbook layout might look like


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Worked Example - MetPlant 2011ContactPeter Card 04 07 508 924

PurposeThis 'Worked Example' illustrates the economic evaluation modelling practices recommended by AusIMM

It compares a gold m ine using existing common technology with a new technology - at concept level

Warnings

This example has not been audited and should not be used without a thorough check.

AuditsSelfaudit P Card Yetto be comp leted

existing case D Martin Yetto be comp leted

newtech case G Darwin Yetto be comp leted

taxes G Wise Yetto be comp leted

externalpeer C Casey Yetto be comp leted

Simplifiedto four cashstreamsEach evaluation is simplified into four streams:Revenue, Operating Costs, CapitalCosts and Taxes. Accounting can be derived from these.

Understanding the colour coding13 Aug2011 B White, "Sales Planfor Operations to2025"

67.4 Every itemofinput datais exposedin acell usingblue font onablue background

It has its source, date andpersonin blue font inthe rowimmediately above.(Not as ahiddencell note)

67.4 202.2 Any itemthat is dubious or needingverificationis inpink font

Every itemwhichis referencedacross fromanother worksheet is ingreenfont ong reenbackground.

recovery % silver 36% 36% The complete rowis referencedacross includingits title incolumnA as acheckthat the correct datais beingreferenced.

Ifareferenced cell is inColumnB inthe source worksheet thenit appears inthe same column(B) inthis worksheet. (this greatly reduces err

Therefore if2013 is incolumnK inone worksheet thenit is incolumnKin every other worksheet

134.8 Every algorithmmust use cells only fromthis worksheet.(It does not reference datainanother worksheet, nor containhiddenfreshdata)

134.8 Computational algorithms shouldnot change across arow.Ifthere is anexceptionit shouldbe highlightedwithadarkborder

67.4 Some people use italics for nominal terms dataandvert ical font for real terms data

Existing casecarbon in pulp technology

NPV - Existing Case A$ 2,007,342

IRR - Existing Case 9.1%

Life of Mine units Total 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Cashstream 1: Production and RevenueProduction10 Aug11 T Bensonmine schedule "Mine Plan12 June 11"

Ore Production tonnes 2,150,000 300,000 500,000 500,000 500,000 350,000

Head grade grams/tonne 3.1 2.5 3.1 3.8 2.9 2.8

Contained gold mined ounces 213,183 0 0 0 24,116 49,839 61,093 46,624 31,511 0 0

Processing Recovery % of contained gold 78% 83% 83% 83% 83%

Gold produced ounces 175,736 0 0 0 18,810 41,367 50,707 38,698 26,154 0 0

Sales23 Aug11 J Gomachie: "SalesPlan: July 2011"

Gold in circuit weeks 3 3 3 3 3 3 3 3 3 3

Gold in circuit ounces 0 0 0 1,085 2,387 2,925 2,233 1,509 0 0

Gold sold ounces 175,736 0 0 17,725 40,065 50,169 39,391 26,878 1,509 0

Revenue23 Aug10 ABC Company Forecastof goldprice

G old pr ic e For ec as t A$ /ounc e Re al 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Gold Revenue A$ Real 175,736,334 0 0 0 17,725,080 40,065,236 50,168,501 39,390,613 26,877,999 1,508,904 0

23 Aug11 JGomachie: "Sales Plan: July 2011"

Debtors days 30 30 30 30 30 30 30 30 30

Debtors - Closing A$ Real 0 0 1,456,856 3,293,033 4,123,438 3,237,585 2,209,151 0 0

Cashstream1:Revenue -Existing sA$ R ea l 1 75 ,7 36 ,3 34 0 0 16,268,224 38,229,059 49,338,096 40,276,467 27,906,433 3,718,055 0

Cashstream 2: Capital Costs10 Aug10 G Dawson"CapitalCostEstimate: Indicative EstimatesVersionG"

I ni ti al Ca pi ta lCos ts A$ R ea l 58,000,000 3 ,0 00 ,0 00 3 0, 00 0, 00 0 2 5, 00 0, 00 0

On go ing Cap it al Co st s A$ R ea l 10,000,000 3,0 00,000 4 ,00 0,0 00 2,000 ,000 1,0 00,0 00

Cashstream2:Capital Costs- E x is tiA$ Real 68 ,00 0,0 00 3,000,000 30,000,000 25,000,000 3,000,000 4,000,000 2,000,000 1,000,000 0 0 0

Tax deductions forCapital Expenditure3 May 11 EHermiAssume allcapitalisdeductedinproportiontothe goldsoldover the life of mine.

Tax Deduction for Capital Expenditure % of contained gold 10% 23% 29% 22% 15% 1% 0%

Tax deduction for capital expenditure 68,000,000 6,858,601 15,502,975 19,412,366 15,241,935 10,400,262 583,860 0

Cashstream3: OperatingCosts5 May 11 GDawson"OperatingCostEstimate: Indicative Estimates." There is nowaste tobe mined.

m in in g co st p er to nn e A $ Re al / t on ne o r 31 5 5 6 7 8

mining cost A$ Real 13,300,000 1,500,000 2,500,000 3,000,000 3,500,000 2,800,000 0 0

p ro ce ss in g co st p er t on ne A $ R ea l/ t on ne o r 100 20 20 20 20 20

processing cost A$ Real 43,000,000 6,000,000 10,000,000 10,000,000 10,000,000 7,000,000 0 0

fixed costs A$ Real 15,000,000 3,0 00,000 3 ,00 0,0 00 3,000 ,000 3,0 00,0 00 3,000 ,00 0

Cashstream3:Operating Costs-EA$ Real 71 ,30 0,0 00 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0cost per ounce A$/ounce Real 558 375 316 426 489 0 0

Cashstream4: Taxes

GovernmentRoyaties2 June 11 R Torply: SA State Royalty is1%of revenue paid monthly

State Royalty % of revenue 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

State Royalty A$ Real 1,757,363 0 0 0 177,251 400,652 501,685 393,906 268,780 15,089 0

CompanyIncomeTax2 June 11 R Torply: Company Income tax rate is30%. The cashpaymentaveragesmidyear. Assume operatingcostcashstreamapproximatesthe costof goodssold.

Gold Revenue 175,736,334 0 0 0 17,725,080 40,065,236 50,168,501 39,390,613 26,877,999 1,508,904 0ess

Cashstream 3: Operating Costs - Existing Case 71,300,000 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0

Tax deduction for capital expenditure 68,000,000 0 0 0 6,858,601 15,502,975 19,412,366 15,241,935 10,400,262 583,860 0

State Royalty 1,757,363 0 0 0 177,251 400,652 501,685 393,906 268,780 15,089 0

Assessable Income 34,678,971 0 0 0 189,228 8,661,608 14,254,450 7,254,773 3,408,957 909,955 0

Company Income Tax Rate % of assessable income 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%

Income Tax 10,403,691 0 0 0 56,768 2,598,483 4,276,335 2,176,432 1,022,687 272,986 0

Income tax payment 10,403,691 0 0 0 56,768 2,598,483 4,276,335 2,176,432 1,022,687 272,986 0

Cashstream4:Taxes- E xi st in g Ca se A $ R ea l 1 2 ,1 6 1, 05 5 0 0 0 234,019 2,999,135 4,778,020 2,570,338 1,291,467 288,075 0

Cashflow and NPV

CashlowsCashstream1: Revenue -ExistingCase A$ Real 175,736,334 0 0 0 16,268,224 38,229,059 49,338,096 40,276,467 27,906,433 3,718,055 0

Cashstream2: CapitalCosts-ExistingCaseA$ Real 68,000,000 3,000,000 30,000,000 25,000,000 3,000,000 4,000,000 2,000,000 1,000,000 0 0 0

Cashstream3: OperatingCosts-ExistingCaA$ Real 71,300,000 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0

Cashstream4: Taxes-ExistingCase A$ Real 12,161,055 0 0 0 234,019 2,999,135 4,778,020 2,570,338 1,291,467 288,075 0

Cashflow-Existing Case A$ Real 24 ,27 5,2 80 -3,000,000 -30,000,000 -25,000,000 2,534,205 15,729,924 26,560,076 20,206,129 13,814,966 3,429,979 0


Discounting17 July 11 F Greenemail: discountrate forinvestmentingoldis 8%Real. The base date is1 July 2011

Discount Rate % Real 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%

Discount Factor 0.96 0.89 0.82 0.76 0.71 0.65 0.61 0.56 0.52 0.48

Discounted Cashflow - Existing Case A$ Real 2,00 7,3 42 -2,8 86,751 -26 ,72 9,1 79 -20,624 ,36 7 1,9 35,792 11 ,12 5,5 05 17,393,968 1 2,25 2,6 13 7,756 ,60 5 1,7 83,157 0

Cumulative NPV -Existing Case A$ -2,886,751 -29,615,930 -50,240,297 -48,304,505 -37,179,000 -19,785,033 -7,532,420 224,185 2,007,342 2,007,342

NPV- Existing Case A$ 2,007,342

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2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0A$M

Existing Case -Four Cash Streams

Ca s hs tr ea m 2: C ap it al C o s ts - E xi st in g C a se C as hf lo w D e fi ci t C as hs tr ea m 3: O pe ra ti ng C o s ts - E xi st in g C a se

C a sh fl ow i f po si ti ve C as hs tr ea m 4: T ax es - E xi st in g C as e

0

1

2

3

4

5

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0

100,000

200,000

300,000

400,000

500,000

600,000

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0

AuGrams/Tonne

TonnesOreorOuncesGold

Existing Case -Mining

Ore P ro du ctio n He ad g ra de

0

200

400

600

800

1,000

1,200

0

20

40

60

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0

$/ounce

GoldOunces(000's)

Existing Case -Sales, Price, Margin

Go ld s o ld Go ld p r ic e F o rec as t P r et a x m a rg i n/o z

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0

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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

A$M

Existing Case -NPV

D is co un te d Ca sh fl ow - E xi st in g Ca se C um ul at iv e N P V - Ex is ti ng C as e

0

5,000,000

10,000,000

15,000,000

20,000,000

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0A$

Existing Case -Opex

m in in g co st p ro ce ss in gc os t f ixe d c os ts

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020A$

Existing Case -Capex

I ni ti al C ap it al C os ts O ng oi ng C ap it al C os ts

Intro & Audit

worksheetWorkings in one worksheet

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Worked Example - MetPlant 2011ContactPeter Card 04 07 508 924

PurposeThis 'Worked Example' illustrates the economic evaluation modelling practices recommended by AusIMM

It compares a gold m ine using existing common technology with a new technology - at concept level

Warnings

This example has not been audited and should not be used without a thorough check.

AuditsSelfaudit P Card Yetto be comp leted

existing case D Martin Yetto be comp leted

newtech case G Darwin Yetto be comp leted

taxes G Wise Yetto be comp leted

externalpeer C Casey Yetto be comp leted

Simplifiedto four cashstreamsEach evaluation is simplified into four streams:Revenue, Operating Costs, CapitalCosts and Taxes. Accounting can be derived from these.

Understanding the colour coding13 Aug2011 B White, "Sales Planfor Operations to2025"

67.4 Every itemofinput datais exposedin acell usingblue font onablue background

It has its source, date andpersonin blue font inthe rowimmediately above.(Not as ahiddencell note)

67.4 202.2 Any itemthat is dubious or needingverificationis inpink font

Every itemwhichis referencedacross fromanother worksheet is ingreenfont ong reenbackground.

recovery % silver 36% 36% The complete rowis referencedacross includingits title incolumnA as acheckthat the correct datais beingreferenced.

Ifareferenced cell is inColumnB inthe source worksheet thenit appears inthe same column(B) inthis worksheet. (this greatly reduces err

Therefore if2013 is incolumnK inone worksheet thenit is incolumnKin every other worksheet

134.8 Every algorithmmust use cells only fromthis worksheet.(It does not reference datainanother worksheet, nor containhiddenfreshdata)

134.8 Computational algorithms shouldnot change across arow.Ifthere is anexceptionit shouldbe highlightedwithadarkborder

67.4 Some people use italics for nominal terms dataandvert ical font for real terms data





Cashstream 1: Production and RevenueProduction10 Aug11 T Bensonmine schedule "Mine Plan12 June 11"








Gold in circuit ounces 0 0 0 1,085 2,387 2,925 2,233 1,509 0 0

Gold sold ounces 175,736 0 0 17,725 40,065 50,169 39,391 26,878 1,509 0

Revenue23 Aug10 ABC Company Forecastof goldprice

G old pr ic e For ec as t A$ /ounc e Re al 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Gold Revenue A$ Real 175,736,334 0 0 0 17,725,080 40,065,236 50,168,501 39,390,613 26,877,999 1,508,904 0

23 Aug11 JGomachie: "Sales Plan: July 2011"

Debtors days 30 30 30 30 30 30 30 30 30

Debtors - Closing A$ Real 0 0 1,456,856 3,293,033 4,123,438 3,237,585 2,209,151 0 0

Cashstream1:Revenue -Existing sA$ R ea l 1 75 ,7 36 ,3 34 0 0 16,268,224 38,229,059 49,338,096 40,276,467 27,906,433 3,718,055 0

Cashstream 2: Capital Costs10 Aug10 G Dawson"CapitalCostEstimate: Indicative EstimatesVersionG"

I ni ti al Ca pi ta lCos ts A$ R ea l 58,000,000 3 ,0 00 ,0 00 3 0, 00 0, 00 0 2 5, 00 0, 00 0

On go ing Cap it al Co st s A$ R ea l 10,000,000 3,0 00,000 4 ,00 0,0 00 2,000 ,000 1,0 00,0 00

Cashstream2:Capital Costs- E x is tiA$ Real 68 ,00 0,0 00 3,000,000 30,000,000 25,000,000 3,000,000 4,000,000 2,000,000 1,000,000 0 0 0

Tax deductions forCapital Expenditure3 May 11 EHermiAssume allcapitalisdeductedinproportiontothe goldsoldover the life of mine.

Tax Deduction for Capital Expenditure % of contained gold 10% 23% 29% 22% 15% 1% 0%

Tax deduction for capital expenditure 68,000,000 6,858,601 15,502,975 19,412,366 15,241,935 10,400,262 583,860 0

Cashstream3: OperatingCosts5 May 11 GDawson"OperatingCostEstimate: Indicative Estimates." There is nowaste tobe mined.

m in in g co st p er to nn e A $ Re al / t on ne o r 31 5 5 6 7 8

mining cost A$ Real 13,300,000 1,500,000 2,500,000 3,000,000 3,500,000 2,800,000 0 0

p ro ce ss in g co st p er t on ne A $ R ea l/ t on ne o r 100 20 20 20 20 20

processing cost A$ Real 43,000,000 6,000,000 10,000,000 10,000,000 10,000,000 7,000,000 0 0

fixed costs A$ Real 15,000,000 3,0 00,000 3 ,00 0,0 00 3,000 ,000 3,0 00,0 00 3,000 ,00 0

Cashstream3:Operating Costs-EA$ Real 71 ,30 0,0 00 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0cost per ounce A$/ounce Real 558 375 316 426 489 0 0

Cashstream4: Taxes

GovernmentRoyaties2 June 11 R Torply: SA State Royalty is1%of revenue paid monthly

State Royalty % of revenue 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

State Royalty A$ Real 1,757,363 0 0 0 177,251 400,652 501,685 393,906 268,780 15,089 0

CompanyIncomeTax2 June 11 R Torply: Company Income tax rate is30%. The cashpaymentaveragesmidyear. Assume operatingcostcashstreamapproximatesthe costof goodssold.

Gold Revenue 175,736,334 0 0 0 17,725,080 40,065,236 50,168,501 39,390,613 26,877,999 1,508,904 0ess

Cashstream 3: Operating Costs - Existing Case 71,300,000 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0Tax deduction for capital expenditure 68,000,000 0 0 0 6,858,601 15,502,975 19,412,366 15,241,935 10,400,262 583,860 0

State Royalty 1,757,363 0 0 0 177,251 400,652 501,685 393,906 268,780 15,089 0

Assessable Income 34,678,971 0 0 0 189,228 8,661,608 14,254,450 7,254,773 3,408,957 909,955 0

Company Income Tax Rate % of assessable income 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%

Income Tax 10,403,691 0 0 0 56,768 2,598,483 4,276,335 2,176,432 1,022,687 272,986 0

Income tax payment 10,403,691 0 0 0 56,768 2,598,483 4,276,335 2,176,432 1,022,687 272,986 0

Cashstream4:Taxes- E xi st in g Ca se A $ R ea l 1 2 ,1 6 1, 05 5 0 0 0 234,019 2,999,135 4,778,020 2,570,338 1,291,467 288,075 0

Cashflow and NPV

CashlowsCashstream1: Revenue -ExistingCase A$ Real 175,736,334 0 0 0 16,268,224 38,229,059 49,338,096 40,276,467 27,906,433 3,718,055 0

Cashstream2: CapitalCosts-ExistingCaseA$ Real 68,000,000 3,000,000 30,000,000 25,000,000 3,000,000 4,000,000 2,000,000 1,000,000 0 0 0

Cashstream3: OperatingCosts-ExistingCaA$ Real 71,300,000 0 0 0 10,500,000 15,500,000 16,000,000 16,500,000 12,800,000 0 0

Cashstream4: Taxes-ExistingCase A$ Real 12,161,055 0 0 0 234,019 2,999,135 4,778,020 2,570,338 1,291,467 288,075 0

Cashflow-Existing Case A$ Real 24 ,27 5,2 80 -3,000,000 -30,000,000 -25,000,000 2,534,205 15,729,924 26,560,076 20,206,129 13,814,966 3,429,979 0


Discounting17 July 11 F Greenemail: discountrate forinvestmentingoldis 8%Real. The base date is1 July 2011

Discount Rate % Real 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%

Discount Factor 0.96 0.89 0.82 0.76 0.71 0.65 0.61 0.56 0.52 0.48

Discounted Cashflow - Existing Case A$ Real 2,00 7,3 42 -2,8 86,751 -26 ,72 9,1 79 -20,624 ,36 7 1,9 35,792 11 ,12 5,5 05 17,393,968 1 2,25 2,6 13 7,756 ,60 5 1,7 83,157 0

Cumulative NPV -Existing Case A$ -2,886,751 -29,615,930 -50,240,297 -48,304,505 -37,179,000 -19,785,033 -7,532,420 224,185 2,007,342 2,007,342

NPV- Existing Case A$ 2,007,342

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0

10

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30

40

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0A$M

Existing Case -Four Cash Streams

Ca s hs tr ea m 2: C ap it al C o s ts - E xi st in g C a se C as hf lo w D e fi ci t C as hs tr ea m 3: O pe ra ti ng C o s ts - E xi st in g C a se

C a sh fl ow i f po si ti ve C as hs tr ea m 4: T ax es - E xi st in g C as e

0

1

2

3

4

5

6

0

100,000

200,000

300,000

400,000

500,000

600,000

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0

AuGrams/Tonne


Existing Case -Mining

Ore P ro du ctio n He ad g ra de

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800

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1,200

0

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2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0

$/ounce

GoldOunces(000's)

Existing Case -Sales, Price, Margin

Go ld s o ld Go ld p r ic e F o rec as t P r et a x m a rg i n/o z

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-40

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-10

0

10

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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

A$M

Existing Case -NPV

D is co un te d Ca sh fl ow - E xi st in g Ca se C um ul at iv e N P V - Ex is ti ng C as e

0

5,000,000

10,000,000

15,000,000

20,000,000

2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0A$

Existing Case -Opex

m in in g co st p ro ce ss in gc os t f ixe d c os ts

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020A$

Existing Case -Capex

I ni ti al C ap it al C os ts O ng oi ng C ap it al C os ts

Intro & Audit

worksheet

Workings in one worksheet

whatwhohow

audits

Summaryof results

inputs,computations,

outputs,results



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such as Cost reduction

Day-to-day comparisons

Pre-Feasibility or Selection Phase Studies



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such as

Major assessments of operations

Major assessments of projects

Major evaluations of the whole business

Final Feasibility Studies

M&A



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Intro &Audit

Li fe of Mi ne u ni ts T ota l 2 01 1 2 01 2 2 013 20 14 2 01 5 2 016 20 17 2 01 8 2 01 9

Cashstream1:Production and RevenueProduction13 Aug11 TBensonmine schedule "Mine Planfornew technology 12 Aug11"O r e P r od u ct i on t o nn e s 4,300,000 6 0 0, 0 0 0 1 , 00 0 ,0 0 0 1 , 00 0 , 00 0 1 , 00 0 ,0 0 0 7 0 0 ,0 0 0

H ea d gr ad e g ra ms /t on ne 1.5 1. 3 1.5 1.6 1 .7 1.1

C on ta in ed go ld mi ne d o un ce s 2 04 ,1 80 0 0 0 2 5, 08 0 4 8, 23 2 5 1, 44 7 5 4,6 62 24,759 0

Processing Re cove ry % of co ntained gold 75 % 80% 80% 8 0% 80%

Gold produced ou nce s 162 ,090 0 0 0 18,8 10 38,585 41,158 43 ,7 30 19,807 0

Sales23 Aug 11 J Gomachie: "SalesPlan: July 2011"

Gold in circuit we eks 0 3 3 3 3 3 3 3 3 3

Gold in circuit ou nce s 0 0 0 1,085 2 ,226 2,374 2,52 3 1,143 0

Gold sold ou nce s 162 ,090 0 0 17,7 25 37,444 41,009 43 ,5 81 2 1, 18 7 1 ,1 43

Revenue23 Aug 10 ABCCompany Forecast ofgoldprice

Go ld pr ice Fo re ca st A $/ ou nc e Re al 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0

G ol d Re ve nu e A $ R ea l 1 6 2, 09 0, 03 2 0 0 0 1 7 ,7 25 ,0 80 3 7, 44 4, 3 48 4 1, 0 09 ,1 52 4 3, 58 1, 49 9 2 1, 18 7 ,2 37 1 ,1 4 2, 71 6

23 Aug 11 J Gomachie: "SalesPlan: July 2011"

Debtors days 0 0 30 3 0 30 30 30 30 30 30

De bt ors -C lo si ng A $ Re al 0 0 1 ,4 56 ,8 56 3 ,0 77 ,6 18 3 ,3 70 ,6 15 3 ,5 82 ,0 41 1 ,7 41 ,4 17 0

Cashstream1:Revenue -AlternativeA $ R ea l 1 6 2 ,0 9 0, 0 32 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 23 , 58 7 4 0 ,7 1 6, 1 54 4 3, 3 70 , 07 3 2 3 ,0 27 , 86 1 2 , 88 4 ,1 3 3

Cashstream2:Capital Costs10 Aug11 GDawsonemail"CapitalCostEst imate: Indicat ive Est imatesforNew Technology route"

I n it i al C a pi t al C o st s A $ R e al 83,000,000 3 , 0 0 0 , 00 0 4 0 , 0 0 0, 0 0 0 4 0 , 0 0 0 ,0 0 0

O n g o in g C a p i ta l C o s ts A $ R e a l 15,000,000 6 , 0 00 , 00 0 6 , 00 0 ,0 0 0 2 , 00 0 , 00 0 1 , 00 0 ,0 0 0

Cashstream2:Capital Costs -AlterativeA $ Re a l 9 8 , 00 0 ,0 0 0 3 , 00 0 ,0 0 0 4 0, 0 00 , 00 0 4 0 ,0 0 0, 0 00 6 , 00 0 ,0 0 0 6 , 00 0 ,0 00 2 , 00 0 ,0 0 0 1 , 00 0, 0 00 0 0

Tax deductions forCapital Expenditure3 May 11 EHermiAssume allcapitalisdeductedinproport iontothe goldsoldoverthe life of mine.

Ta x De du cti on fo rC ap ita lE xp en di tu re % of c on ta in ed go ld 1 1% 2 3% 2 5% 2 7% 1 3% 1 %

T ax d e du ct io n fo rc ap it al e xp en d it ur e 9 8 ,0 00 ,0 00 1 0 ,7 16 ,6 24 2 2, 63 8, 9 38 2 4, 7 94 ,2 26 2 6, 34 9, 47 3 1 2, 80 9 ,8 52 6 90 ,8 89

Cashstream3: OperatingCosts25 May 11 GDawsonemail"Operat ingCostEst imate: Indicat ive Est imatesfornew technology." There isno waste tobe mined.

m i n i ng c o s t p er t o n n e A $ R e a l/ t o n n e o re 25 4 4 5 6 6

m in in gc os t A $ R ea l 2 1, 60 0, 00 0 2 ,4 00 ,0 00 4 ,0 00 ,0 00 5 ,0 00 ,0 00 6 ,0 00 ,0 00 4 ,2 00 ,0 00 0

p r o c es s i n g co s t p e r to n n e A $ R e a l / t o n n e o r e 75 15 15 15 15 15

p ro ce ss in gc os t A $ R ea l 6 4, 50 0, 00 0 9 ,0 00 ,0 00 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 0, 50 0, 00 0 0f ix ed c os ts A $ R ea l 17,500,000 3 , 5 00 , 00 0 3 , 50 0 ,0 0 0 3 , 50 0 , 00 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0

Cashstream3:Operating Costs -lterativeA $ R ea l 1 0 3 ,6 0 0, 0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0costpe rounce A$/ounce Real 792 583 5 71 560 919 0

Cashstream4: Taxes

GovernmentRoyaties2 June11 RTorply: SAStateRoyalty is1% ofrevenuepaidmonthly

St ate R oy al ty % of re ve nu e 0 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 %S ta te R oy al ty A $ R ea l 1 ,6 20 ,9 00 0 0 0 1 77 ,2 51 3 74 ,4 43 4 10 ,0 92 4 35 ,8 15 2 11 ,8 72 1 1, 42 7

CompanyIncomeTax2 June 10 R Torply: C ompany Income tax rate is30%. The cashpaymentaveragesmidyear. Assume operat ingcostcashstreamapproximatesthe costof goodssold.

G ol dR ev en ue 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16lessC a sh s tr e am 3 : O p er a ti n g Co s ts - A lt e rn a ti v e A 1 0 3 ,6 0 0, 0 00 0 0 0 1 4 , 90 0 ,0 0 0 2 2 ,5 0 0, 0 0 0 2 3 ,5 0 0 ,0 0 0 2 4 ,5 0 0, 0 00 1 8 ,2 0 0 ,0 0 0 0

T ax d e du ct io n fo rc ap it al e xp en d it ur e 9 8 ,0 00 ,0 00 0 0 0 1 0 ,7 16 ,6 24 2 2, 63 8, 9 38 2 4, 7 94 ,2 26 2 6, 34 9, 47 3 1 2, 80 9 ,8 52 6 90 ,8 89

St ate R oy al ty 1 ,6 20 ,9 00 0 0 0 1 77 ,2 51 3 74 ,4 43 4 10 ,0 92 4 35 ,8 15 2 11 ,8 72 1 1, 42 7

Assessable Income -41,13 0,868 0 0 0 -8,068 ,7 94 - 8,0 6 9 ,0 3 3 - 7 ,6 9 5, 1 66 - 7 ,7 0 3 ,7 8 9 - 1 0 ,0 3 4, 4 87 4 4 0, 4 00

C om pa ny In co me Ta x Ra te % o f a ss es sa bl e i nc om e 0 . 0% 3 0. 0% 3 0. 0 % 3 0 .0 % 3 0. 0% 3 0. 0 % 3 0 .0 % 3 0. 0% 3 0. 0 % 3 0. 0%Income Tax -12,33 9,260 0 0 0 -2,420 ,6 38 - 2,4 2 0 ,7 1 0 - 2 ,3 0 8, 5 50 - 2 ,3 1 1 ,1 3 7 - 3 , 01 0 ,3 4 6 1 3 2, 1 20

I nc ome ta x p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0,6 38 - 2,4 2 0 ,7 1 0 - 2 ,3 0 8, 5 50 - 2 ,3 1 1 ,1 3 7 - 3 , 01 0 ,3 4 6 1 3 2, 1 20

Cashstream4:Taxes -AlternativeA $ R ea l - 1 0, 7 1 8, 3 60 0 0 0 - 2 ,2 43 , 38 7 - 2 ,0 4 6, 2 66 - 1, 8 98 , 45 8 - 1 ,8 7 5, 3 22 - 2 ,7 9 8, 4 74 1 4 3, 5 47

Cashflow and NPVCashlowsCashstream1: Revenue -Alternat ive AA$ Real 162,090,032 0 0 0 1 6 ,2 68 ,2 24 3 5, 82 3, 5 87 4 0, 7 16 ,1 54 4 3, 37 0, 07 3 2 3, 02 7 ,8 61 2 ,8 8 4, 13 3

Cashstream2: CapitalCosts-Alternat ive AA$ Real 98,000,000 3 ,0 0 0, 00 0 4 0, 00 0, 00 0 4 0, 00 0 ,0 00 6 , 00 0, 00 0 6 ,0 00 ,0 0 0 2 ,0 0 0, 00 0 1 ,0 00 ,0 00 0 0Cashstream3: Operat ingCosts-Alternat ive AA$ Real 103,600,000 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0

Cashstream4: Taxes-Alternat ive A A$ Real -10,718,360 0 0 0 -2,243 ,3 87 - 2,0 4 6 ,2 6 6 - 1 ,8 9 8, 4 58 - 1 ,8 7 5 ,3 2 2 - 2 , 79 8 ,4 7 4 1 4 3, 5 47

Cashflow-Alternative A A $ R ea l - 2 8, 7 9 1, 6 08 - 3 , 00 0 , 00 0 - 4 0 ,0 0 0 ,0 0 0 - 4 0 , 00 0 , 00 0 - 2 , 38 8 , 38 8 9 , 3 69 , 8 53 1 7 , 11 4 , 6 12 1 9 , 74 5 , 39 5 7 , 6 26 , 3 35 2 , 7 40 , 5 85

I RR -A lt er na ti ve A - 9. 4%

Discounting17 July 10 F Greenemail: discountrate forinvestmentingoldis8%Real. The base date is1 July 2011

Discou ntRate % Re al 8% 8% 8% 8 % 8% 8% 8% 8% 8%

Discou ntFactor 0.96 0. 89 0.82 0.7 6 0 .71 0.65 0. 61 0.56 0.52

D i s co u n t e d Ca s h f l o w - A l t e rn a t i ve A A $ R e a l - 3 7 , 8 3 3, 7 9 8 - 2 , 8 8 6, 7 5 1 - 3 5 , 6 3 8, 9 0 6 - 3 2 , 9 98 , 9 8 7 - 1 , 8 2 4 ,4 0 7 6 , 62 7 ,1 3 6 1 1 ,2 0 8 ,2 1 4 1 1 ,9 7 3, 2 32 4 , 28 1 ,9 1 2 1 , 4 24 , 75 9C u mu l at i ve N P V- A lt e rn a ti v e A A $ - 2 ,8 8 6, 7 5 1 - 3 8 ,5 2 5, 6 57 - 7 1, 5 24 , 64 3 - 7 3, 3 4 9, 0 51 - 6 6 ,7 2 1, 9 15 - 5 5, 5 13 , 7 01 - 4 3, 5 4 0, 4 68 - 3 9 ,2 5 8, 5 57 - 3 7, 8 33 , 7 98

NPV- Alternative A A$ -37,833,798

D atafor G raphs

Life o fM in e u n its Total 2 011 201 2 20 13 2 014 201 5 20 16 2 017 201 8 20 19

Ore P ro d u ctio n 0 0 0 6 00,00 0 1 ,000 ,0 00 1 ,0 00 ,0 00 1 ,0 00 ,0 00 7 00 ,0 00 0

He ad gra de 0 .0 0.0 0 .0 1.3 1.5 1 .6 1.7 1.1 0 .0

C o n tain e dgo ld min ed 0 0 0 25,08 0 48 ,2 32 5 1, 44 7 5 4, 66 2 2 4,7 59 0

Go ld pro du ced 0 0 0 18,81 0 38 ,5 85 4 1, 15 8 4 3, 73 0 1 9,8 07 0

Go ld p rice Fo re cast 1,00 0 1,0 00 1 ,000 1,00 0 1 ,0 00 1,000 1,00 0 1 ,0 00 1 ,0 00

Go ld sold 0 0 0 17,72 5 37 ,4 44 4 1, 00 9 4 3, 58 1 2 1,1 87 1 ,1 43

C ash stre am 1 : Re ve n u e - Altern ative A 0 0 0 16,26 8,22 4 35 ,823 ,5 8 7 4 0 ,7 1 6, 1 54 4 3, 3 70 , 07 3 2 3 ,0 27 ,8 6 1 2 , 88 4 ,1 3 3

C ash stre am 2 : C ap ital C o sts -Alte rn ative A -3,00 0,00 0 -40 ,0 0 0, 0 00 - 4 0, 0 00 , 00 0 - 6 ,0 0 0, 0 00 - 6 ,0 00 ,0 00 - 2, 00 0, 00 0 - 1, 00 0, 00 0 0 0

C ash stre am 3 : Op e ratin gC o sts- Alte rn ativ e A -10 3,600 ,000 0 0 0 -14,90 0,00 0 -22 ,500 ,0 0 0 - 2 3, 5 00 , 00 0 - 2 4, 5 00 , 00 0 - 1 8, 2 00 ,0 00 0

C as hs tr ea m 4: Ta xes - Al te rna ti ve A 0 0 0 2, 243, 38 7 2 ,046 ,2 6 6 1 , 89 8 ,4 58 1 , 87 5, 3 22 2 , 79 8 ,4 7 4 - 1 43 , 54 7

C ash flo w i fp o sitive 0 0 0 0 9 ,369 ,8 5 3 1 7 ,1 1 4, 6 12 1 9, 7 45 , 39 5 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

C ash flow Defici t 3,00 0,00 0 40 ,0 00,0 00 4 0,000 ,000 2,3 88,38 8 0 0 0 0 0

C ash Flow -3,00 0,00 0 -40 ,0 0 0, 0 00 - 4 0, 0 00 , 00 0 - 2 ,3 8 8, 3 88 9 , 36 9 ,8 5 3 1 7 ,1 1 4, 6 12 1 9, 7 45 , 39 5 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

Disco u n te dC ash flo w- Alte rn ativ e A -2,88 6,75 1 -35 ,6 3 8, 9 06 - 3 2, 9 98 , 98 7 - 1 ,8 2 4, 4 07 6 , 62 7 ,1 3 6 1 1 ,2 0 8, 2 14 1 1, 9 73 , 23 2 4 , 28 1 ,9 1 2 1 , 42 4 ,7 5 9

C u mu lative NP V- Alte rn ative A -2,88 6,75 1 -38 ,5 2 5 ,6 5 7 - 7 1 , 52 4 , 64 3 - 7 3 ,3 4 9 ,0 5 1 - 6 6 , 72 1 ,9 1 5 - 5 5, 5 13 , 70 1 - 4 3, 5 40 , 46 8 - 3 9, 2 58 ,5 57 -3 7 ,8 3 3 ,7 9 8

C o stp e ro u n ce so ld 792 5 89 572 56 1 8 78 87 8

C he ck 10 3,600 ,000 14,04 0,38 5 22 ,048 ,8 1 2 2 3 ,4 5 2, 8 58 2 4, 4 42 , 97 2 1 8 ,6 11 ,1 9 4 1 , 00 3 ,7 7 9

P re tax margin /o z 0 0 0 20 8 4 11 428 43 9 1 22 12 2

Life of Mine units Total 2011 2012 2013 2014 2015 2016 2017 2018 2019

Cashstream 1: Production and RevenueProduction

13 Aug 11 TBenson mine schedule "Mine Plan fornew technology 12 Aug 11"

O re P r od u ct io n t on n es 4,300,000 6 0 0 ,0 0 0 1 , 00 0 , 00 0 1 , 00 0 , 00 0 1 , 0 00 , 00 0 7 0 0 ,0 0 0

H ea d gr ad e g ra ms /t on n e 1.5 1.3 1.5 1. 6 1. 7 1 .1

C ontaine d g old min ed oun ce s 20 4,18 0 0 0 0 2 5,08 0 48,23 2 51,4 47 54,6 62 24 ,759 0P roce ssing Reco very % of contained gold 75% 80% 80 % 80 % 8 0%

Gold produ ce d oun ce s 16 2,09 0 0 0 0 1 8,81 0 38,58 5 41,1 58 43,7 30 19 ,807 0

Sales23 Aug 11 J Gomachie: "SalesPlan: July 2011"Gold in circuit wee ks 0 3 3 3 3 3 3 3 3 3

Gold in circuit oun ce s 0 0 0 1 ,085 2,22 6 2,37 4 2,5 23 1,1 43 0

Gold sold oun ce s 16 2,09 0 0 0 1 7,72 5 37,44 4 41,0 09 43,5 81 21 ,187 1,1 43

Revenue23 Aug 10 ABCCompany Forecast ofgo ldpriceG ol d p ri ce Fo re ca st A$ /o un ce Re al 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0

G ol d R ev en ue A $ R ea l 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16


Deb to rs days 0 0 30 3 0 3 0 30 30 30 30 30

D eb to rs -C lo si ng A$ R ea l 0 0 1 ,4 56 ,8 56 3 ,0 77 ,6 18 3 ,3 70 ,6 15 3 ,5 82 ,0 41 1 ,7 41 ,4 17 0

Cashstream 1:Revenue -AlternatiA $ R e a l 1 6 2 ,0 9 0 ,0 3 2 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cashstream 2: Capital Costs10 Aug 11 GDawson email"CapitalCostEst imate: Indicat ive Est imatesforNew Technology route"

I n i ti a l Ca p it a l Co s ts A $ R e al 83,000,000 3 , 0 00 , 0 00 4 0 , 00 0 , 00 0 4 0 , 00 0 , 00 0

O n g oi n g C a pi t al C o st s A $ R e a l 15,000,000 6 , 0 00 , 0 00 6 , 00 0 , 00 0 2 , 00 0 , 00 0 1 , 0 00 , 00 0

Cashstream 2:Capital Costs -AlteratiA $ R e a l 9 8 , 00 0 , 00 0 3 , 00 0 ,0 0 0 4 0 ,0 0 0, 0 00 4 0 ,0 0 0, 0 00 6 , 00 0 ,0 0 0 6 , 00 0 ,0 0 0 2 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 0 0

Tax deductions forCapital Expenditure3 May 11 E HermiAssume allcapitalisdeducted in proport ion to the gold sold overthe life of mine.

T ax De du ct io n f or Ca pi ta lE xp en di tu re % o f c on ta in ed g ol d 1 1% 2 3% 2 5% 2 7% 1 3% 1 %

T a x d ed u ct io n f o rc ap i ta l ex pe n di tu re 9 8 ,0 00 , 00 0 1 0 ,7 1 6, 62 4 2 2, 63 8 ,9 3 8 2 4, 7 94 ,2 2 6 2 6, 3 49 ,4 7 3 1 2 ,8 09 , 85 2 6 90 , 88 9

Cashstream 3: Operating Costs25 May 11 GDawson email"Operat ing CostEst imate: Indicat ive Est imatesforn ew technology." There isno waste to be mined.

m i n i n g c o s t p e rt o n n e A $ R e al / to n n e o re 25 4 4 5 6 6

m in in g co st A$ R ea l 2 1, 60 0, 00 0 2 ,4 00 ,0 00 4 ,0 00 ,0 00 5 ,0 00 ,0 00 6 ,0 00 ,0 00 4 ,2 00 ,0 00 0

p r o c e ss i n g c o st p e r t o n ne A $ R e a l / to n n e o r e 75 1 5 15 15 15 15

p ro ce ss in g c os t A $ R ea l 6 4, 50 0, 00 0 9 ,0 00 ,0 00 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 0, 50 0, 00 0 0

f ix ed co st s A $ R ea l 17,500,000 3 , 5 00 , 0 00 3 , 50 0 , 00 0 3 , 50 0 , 00 0 3 , 5 00 , 00 0 3 , 5 00 , 0 00

Cashstream 3:Operating Costs -AltratiA $ R e a l 1 0 3 ,6 0 0 ,0 0 0 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0co st per ou nce A$ /ounce Re al 79 2 5 83 5 71 560 919 0

Cashstream 4: Taxes

Government Royaties2 June11 RTorply: SAStateRoyalty is1% ofrevenuepaidmonthly

S tate Ro yalty % of rev enue 0. 0% 1.0 % 1.0 % 1.0 % 1. 0% 1 .0% 1 .0% 1 .0% 1.0% 1.0 %

S ta te Ro ya lty A$ Re al 1 ,6 20 ,9 00 0 0 0 1 77 ,2 51 3 74 ,4 43 4 10 ,0 92 4 35 ,8 15 2 11 ,8 72 1 1, 42 7

Company Income Tax2 June 10 R Torply: Co mpany Income tax rate is30%. The cash paymentaverages mid year. Assume operat ing costcashstream approximatesthe costof goodssold.

G ol d R ev en ue 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16less

C a sh st re a m 3 : O p er at in g C o st s -A lt er na ti ve A 1 0 3, 60 0 ,0 0 0 0 0 0 1 4 ,9 0 0, 00 0 2 2, 50 0 ,0 0 0 2 3, 5 00 ,0 0 0 2 4, 5 00 ,0 0 0 1 8 ,2 00 , 00 0 0

T a x d ed u ct io n f o rc ap i ta l ex pe n di tu re 9 8 ,0 00 , 00 0 0 0 0 1 0 ,7 1 6, 62 4 2 2, 63 8 ,9 3 8 2 4, 7 94 ,2 2 6 2 6, 3 49 ,4 7 3 1 2 ,8 09 , 85 2 6 90 , 88 9

S tate Ro yalty 1 ,620 ,900 0 0 0 17 7,25 1 3 74,4 43 4 10,0 92 435, 815 211 ,872 11 ,427

A ss es sa bl e I nc om e - 41 ,1 30 ,8 68 0 0 0 - 8, 06 8, 79 4 - 8, 06 9, 03 3 - 7, 69 5, 16 6 - 7, 70 3, 78 9 - 10 ,0 34 ,4 87 4 40 ,4 00

C o mp an y I n co me T ax R a te % o f a ss es sa bl e i nc om e 0 . 0 % 3 0. 0 % 3 0. 0 % 3 0. 0 % 3 0 .0 % 3 0 .0 % 3 0 .0 % 3 0 .0 % 3 0. 0 % 3 0. 0 %

I nc om e T ax - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20I nc om e t ax p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

Cashstream 4:Taxes -AlternativeA $ R e a l - 1 0, 7 1 8, 3 6 0 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 87 5, 32 2 - 2, 79 8, 47 4 1 43 ,5 47

Cashflow and NPVCashlows

Cashstream 1: Revenue -Alternat ive AA$ Real 162,090,032 0 0 0 1 6 ,2 6 8, 22 4 3 5, 82 3 ,5 8 7 4 0, 7 16 ,1 5 4 4 3, 3 70 ,0 7 3 2 3 ,0 27 , 86 1 2 , 88 4, 1 33

Cashstream 2: CapitalCosts-Alternat ive AA$ Real 98,000,000 3 ,0 0 0, 0 00 4 0 ,0 00 , 00 0 4 0 ,0 0 0, 00 0 6 , 00 0 ,0 00 6 ,0 0 0, 00 0 2 ,0 0 0, 00 0 1 ,0 0 0, 00 0 0 0Cashstream 3: Operat ing Costs-Alternat iveA$ Real 103,600,000 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0

Cashstream 4: Taxes-Alternat ive A A$ Real -10,718,360 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 87 5, 32 2 - 2, 79 8, 47 4 1 43 ,5 47

Cashflow -Alternative A A $ R e a l - 2 8, 7 9 1, 6 0 8 - 3 , 0 00 , 0 00 - 4 0 , 00 0 , 00 0 - 4 0 , 00 0 , 00 0 - 2 , 3 88 , 3 8 8 9 , 3 6 9, 8 5 3 1 7 , 11 4 , 6 12 1 9 , 7 45 , 3 9 5 7 , 6 2 6, 3 3 5 2 , 7 4 0, 5 8 5

I RR - Al te rn at iv e A - 9. 4%

Discounting17 July 10 F Green email: discountrate for in vestment in gold is8% Real. The b ase date is1 July 2011

Discoun tR ate % Re al 8% 8% 8% 8% 8% 8 % 8 % 8% 8%

Discoun tFactor 0. 96 0 .89 0 .82 0 .76 0.71 0.6 5 0.6 1 0. 56 0. 52

D i sc o un t ed C a sh f l ow - A l te r na t iv e A A $ R e a l - 3 7, 8 3 3, 7 9 8 - 2 , 88 6 , 75 1 - 3 5, 6 3 8, 9 0 6 - 3 2, 9 9 8, 9 8 7 - 1 ,8 2 4 ,4 0 7 6 , 62 7 , 13 6 1 1 ,2 0 8 ,2 1 4 1 1 ,9 7 3 ,2 3 2 4 , 2 81 , 9 12 1 , 4 24 , 7 59

C u m ul a ti v e N P V -A l te r na t iv e A A $ - 2 , 88 6 , 75 1 - 3 8, 5 2 5, 6 5 7 - 7 1, 5 2 4, 6 4 3 - 7 3 ,3 4 9 ,0 5 1 - 6 6 ,7 2 1 ,9 1 5 - 5 5 ,5 1 3 ,7 0 1 - 4 3 ,5 4 0 ,4 6 8 - 3 9 ,2 5 8 ,5 5 7 - 3 7 ,8 3 3 ,7 9 8

NPV - Alternative A A$ -37,833,798

Datafor GraphsLife of Mine units Total 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ore P roduction 0 0 0 600,000 1,000,000 1,000,000 1,000,000 700,000 0

Head grade 0.0 0.0 0.0 1.3 1.5 1.6 1.7 1.1 0.0

Containedgold mined 0 0 0 25,080 48,232 51,447 54,662 24,759 0

Gold produced 0 0 0 18,810 38,585 41,158 43,730 19,807 0

Gold price Forecast 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Gold sold 0 0 0 17,725 37,444 41,009 43,581 21,187 1,143

Cashstream 1: Revenue - Al ternative A 0 0 0 16,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,133

Cashstream 2: CapitalCosts - Alt er nat iv e A - 3, 000, 000 - 40, 000 ,0 00 - 40 ,0 00 ,0 00 - 6,0 00 ,0 00 - 6, 00 0, 00 0 - 2, 00 0, 00 0 - 1, 00 0, 00 0 0 0

Cashstream 3: O peratingCosts - Al ternative A -103,600,000 0 0 0 -14,9 0 0, 0 00 - 2 2, 5 00 , 00 0 - 2 3, 5 00 , 00 0 - 2 4, 5 00 , 00 0 - 1 8, 2 00 , 00 0 0

Cashstream 4: Taxes - Alternative A 0 0 0 2,2 4 3, 3 87 2 , 04 6 ,2 6 6 1 , 89 8 ,4 5 8 1 , 87 5 ,3 2 2 2 , 79 8, 4 74 - 1 43 ,547

Cashflow ifpositive 0 0 0 0 9,369,853 17,114,612 19,745,395 7,626,335 2,740,585

Cas hflow D eficit 3,000,000 40,000,0 00 40 ,0 00 ,0 00 2 ,388,388 0 0 0 0 0

Cas h Flow -3,000,000 -40,000,0 00 - 40 ,0 00 ,0 00 - 2,3 8 8, 3 88 9 , 36 9 ,8 5 3 1 7 ,1 1 4, 6 12 1 9 ,7 4 5, 3 95 7 , 62 6, 3 35 2 , 74 0 ,585

DiscountedCashflow - Alt er nat iv e A - 2, 886, 751 - 35, 638 ,9 06 - 32 ,9 98 ,9 87 - 1,8 2 4, 4 07 6 , 62 7 ,1 3 6 1 1 ,2 0 8, 2 14 1 1 ,9 7 3, 2 32 4 , 28 1, 9 12 1 , 42 4 ,759

Cumulative NPV - Al ternative A -2,886,751 -38,525,6 5 7 - 7 1, 5 24 , 64 3 - 7 3,3 4 9, 0 51 - 6 6, 7 21 , 91 5 - 5 5, 5 13 , 70 1 - 4 3, 5 40 , 46 8 - 3 9, 2 58 , 55 7 - 3 7, 8 33 ,798

Costperounce sold 792 589 572 561 878 878

Check 103,600,000 14,0 4 0, 3 85 2 2 ,0 4 8, 8 12 2 3 ,4 5 2, 8 58 2 4 ,4 4 2, 9 72 1 8 ,6 1 1, 1 94 1 , 00 3 ,779

Pretaxmargin/oz 0 0 0 208 411 428 439 122 122

Life of Mine unit s Tot al 2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9

Cashstream1:Production and RevenueProduction13 Aug11 TBensonm ine schedule "Mine Planfornew t echnology 12 Aug11"

O r e P r od u ct i o n t o nn e s 4,300,000 6 0 0, 0 0 0 1 , 00 0 ,0 0 0 1 , 0 00 , 00 0 1 , 00 0 ,0 0 0 7 0 0, 0 00

H ea d gr ad e g ra ms /t o nn e 1.5 1.3 1.5 1.6 1.7 1.1

C on ta in ed go ld mi ne d o un ce s 2 04 ,1 80 0 0 0 2 5, 08 0 4 8, 23 2 5 1, 44 7 5 4, 66 2 2 4, 75 9 0

Processing Reco very %o f cont aine dgold 75% 80% 80% 80% 80%

Gold produced ounces 162,090 0 0 0 18,81 0 38,585 41,15 8 4 3,730 19,807 0



Gold in circuit ounces 0 0 0 1,085 2 ,226 2,374 2 ,523 1,143 0

Gold sold ounces 162,090 0 0 17,72 5 37,444 41,00 9 4 3,581 21,187 1 ,143

Revenue23 Aug 10 ABCCompany Forecast ofgoldpr ice

Go ld pr ic e F ore ca st A$ /o un ce R ea l 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0

G ol d Re ve nu e A $ R e al 1 62 ,0 9 0, 03 2 0 0 0 1 7 ,7 25 ,0 80 3 7, 44 4, 3 48 4 1 ,0 09 ,1 52 4 3, 58 1, 4 99 2 1 ,1 87 ,2 37 1 ,1 42 ,7 1 6


Debt ors days 0 0 30 30 30 30 30 30 30 30

De bt ors -C lo si ng A$ R ea l 0 0 1 ,4 56 ,8 56 3 ,0 77 ,6 18 3 ,3 70 ,6 15 3 ,5 82 ,0 41 1 ,7 41 ,4 17 0

Cashstream1:Revenue -AlternativeA $ R ea l 1 6 2, 0 9 0, 0 32 0 0 1 6 , 26 8 ,2 2 4 3 5 , 82 3 , 58 7 4 0 , 71 6 , 15 4 4 3 , 37 0 , 07 3 2 3 , 02 7 , 86 1 2 , 8 84 , 1 33

Cashstream2:Capital Costs10 Aug11 GDawsonem ail"Capit alCost Est im at e: Indicat ive Est im at esforNewTechnology rout e"

I n it i al C a pi t a lC o st s A $ R e a l 83,000,000 3 , 0 0 0 ,0 0 0 4 0 , 0 0 0 ,0 0 0 4 0 , 0 0 0 ,000

Ongoin g C ap i ta l C os t s A $ R ea l 15,000,000 6 , 0 00 , 00 0 6 , 00 0 ,0 0 0 2 , 0 00 , 00 0 1 , 00 0 ,0 0 0

Cashstream2:Capital Costs -AlterativeA $ R e a l 9 8 ,0 0 0, 0 0 0 3 , 00 0 ,0 00 4 0 ,0 0 0, 0 00 4 0 ,0 00 , 00 0 6 ,0 0 0, 0 00 6 , 00 0 ,0 00 2 , 00 0 ,0 0 0 1 ,0 0 0, 0 00 0 0

Tax deductions forCapital Expenditure3 May 11 EHerm iAssum e allcapit alisdeduct edinproport ion t ot he goldsoldovert he life of m ine.

Ta x De du ct io nf or Ca pi ta lE xp en di tu re % of c on ta in ed go ld 1 1% 2 3% 2 5% 2 7% 1 3% 1 %

T ax d e du ct io n fo rc ap it al e xp e nd it ur e 9 8, 00 0, 0 00 1 0 ,7 16 ,6 24 2 2, 63 8, 9 38 2 4 ,7 94 ,2 26 2 6, 34 9, 4 73 1 2 ,8 09 ,8 52 6 9 0, 88 9

Cashstream3: OperatingCosts25 May 11 GDawsonem ail"Operat ingCost Est im at e: Indicat ive Est im at esfornew t echnology."There isnowast e t obe m ined.

m i n i ng c o s t p e rt o n n e A $ R e al / t o nn e o r e 25 4 4 5 6 6

m in in gc os t A $ R ea l 2 1, 60 0, 00 0 2 ,4 00 ,0 00 4 ,0 00 ,0 00 5 ,0 00 ,0 00 6 ,0 00 ,0 00 4 ,2 00 ,0 00 0

p r o c es s i n g co s t p e r t on n e A $ R e a l / t o n n e o r e 75 15 15 15 15 15

p ro ce ss in gc os t A $ R ea l 6 4, 50 0, 00 0 9 ,0 00 ,0 00 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 0, 50 0, 00 0 0

f ix ed co st s A $ R ea l 17,500,000 3 , 5 00 , 00 0 3 , 50 0 ,0 0 0 3 , 5 00 , 00 0 3 , 50 0 ,0 0 0 3 , 50 0 , 00 0

Cashstream3:Operating Costs -AlterativeA $ R ea l 1 0 3, 6 0 0, 0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0cost pe rounce A$/ounce R eal 792 583 571 560 9 19 0

Cashstream4: Taxes

GovernmentRoyaties2 June11RTorply: SAStateRoyalty is1% ofrevenuepaidmonthly

St at e R oy al ty % of re ve nu e 0 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 % 1 .0 %

S ta te R o ya lt y A $ Re al 1 ,6 20 ,9 00 0 0 0 1 77 ,2 51 3 74 ,4 43 4 10 ,0 92 4 35 ,8 15 2 11 ,8 72 1 1, 42 7

CompanyIncomeTax2 June 10 R Torply: Com pany Incom e t ax rat e is30%. The cashpaym ent averagesm idyear . Assum e operat ingcost cashst ream approxim at est he cost of goodssold.

G ol dR ev en ue 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16less

C a sh s tr e am 3 : O p er a ti n g Co s ts - A lt e rn a t iv e A 1 0 3, 6 0 0, 0 00 0 0 0 1 4 , 90 0 ,0 0 0 2 2 ,5 0 0, 0 0 0 2 3 , 50 0 ,0 0 0 2 4 ,5 0 0, 0 0 0 1 8 , 20 0 ,0 0 0 0

T ax d e du ct io n fo rc ap it al e xp e nd it ur e 9 8, 00 0, 0 00 0 0 0 1 0 ,7 16 ,6 24 2 2, 63 8, 9 38 2 4 ,7 94 ,2 26 2 6, 34 9, 4 73 1 2 ,8 09 ,8 52 6 9 0, 88 9

St at e R oyalt y 1,620 ,9 00 0 0 0 1 77 ,2 51 3 74 ,4 43 4 10 ,0 92 4 35 ,8 15 2 11 ,8 72 1 1, 42 7

As se ssa bl e I nc ome - 41 ,1 30 ,8 68 0 0 0 - 8, 06 8, 79 4 - 8,0 6 9 ,0 3 3 - 7 ,6 9 5, 1 6 6 - 7 ,7 0 3 ,7 8 9 - 1 0, 0 34 ,4 8 7 4 4 0 ,4 0 0

C om pa ny In co me Ta x R at e % o f a ss es sa bl e i n co me 0 . 0% 3 0. 0 % 3 0. 0% 3 0. 0 % 3 0. 0% 3 0. 0 % 3 0. 0% 3 0. 0 % 3 0. 0% 3 0. 0 %

Income Tax -1 2,339,260 0 0 0 -2,420,6 38 -2 ,4 2 0 ,7 1 0 - 2 ,3 0 8, 5 5 0 - 2 ,3 1 1 ,1 3 7 - 3 ,0 1 0, 3 4 6 1 3 2 ,1 2 0

I nc ome t ax p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2,4 2 0 ,7 1 0 - 2 ,3 0 8, 5 5 0 - 2 ,3 1 1 ,1 3 7 - 3 ,0 1 0, 3 4 6 1 3 2 ,1 2 0

Cashstream4:Taxes -AlternativeA $ R ea l - 1 0 ,7 1 8, 3 60 0 0 0 - 2, 2 43 , 38 7 - 2 ,0 4 6, 2 66 - 1, 8 98 , 45 8 - 1 ,8 7 5, 3 22 - 2, 7 98 , 47 4 1 43 , 54 7

Cashflow and NPVCashlowsCashst ream 1: Revenue -Alt ernat ive AA$ Real 162,090,032 0 0 0 1 6 ,2 68 ,2 24 3 5, 82 3, 5 87 4 0 ,7 16 ,1 54 4 3, 37 0, 0 73 2 3 ,0 27 ,8 61 2 ,8 84 ,1 3 3

Cashst ream 2: Capit alCost s-Alt ernat iveAA$ Real 98,000,000 3 , 0 0 0 ,0 0 0 4 0 , 0 0 0 ,0 0 0 4 0 , 0 0 0 ,0 0 0 6 ,0 0 0, 00 0 6 ,0 00 ,0 0 0 2 ,0 0 0, 00 0 1 ,0 00 ,0 0 0 0 0

Cashst ream 3: Operat ingCost s-Alt ernat ive AA$ Real 103,600,000 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0

Cashst ream 4: Taxes-Alt ernat ive AA$ Real -10,718,360 0 0 0 -2,243,3 87 -2 ,0 4 6 ,2 6 6 - 1 ,8 9 8, 4 5 8 - 1 ,8 7 5 ,3 2 2 - 2 ,7 9 8, 4 7 4 1 4 3 ,5 4 7

Cashflow-Alternative A A $ R ea l - 2 8 ,7 9 1, 6 08 - 3 , 00 0 , 00 0 - 4 0 ,0 0 0 ,0 0 0 - 4 0 ,0 0 0 ,0 0 0 - 2 , 38 8 , 38 8 9 , 3 69 , 8 53 1 7 , 11 4 , 61 2 1 9 , 74 5 , 39 5 7 , 6 26 , 33 5 2 , 7 40 , 5 85


Discounting17 July 10 F Greenem ail: discount rat e for invest m ent ingoldis8%Real. The base dat e is1 July 2011

Disco unt Rat e %R eal 8% 8 % 8% 8% 8% 8% 8% 8% 8%

Disco unt Fact or 0.96 0.89 0 .82 0.76 0 .71 0.65 0 .61 0.56 0 .52

D i sc o un t ed C a sh f l ow - A lt e rn a t iv e A A $ R e a l - 3 7 ,8 3 3, 7 98 - 2 , 88 6 ,7 5 1 - 3 5, 6 38 , 9 06 - 3 2 ,9 9 8, 9 87 - 1 ,8 2 4, 4 0 7 6 , 62 7 ,1 3 6 1 1 , 20 8 ,2 1 4 1 1 ,9 7 3, 2 3 2 4 , 28 1 , 91 2 1 , 42 4 ,7 5 9

C u mu l at i ve N P V - A lt e rn a t iv e A A $ - 2 , 88 6 ,7 5 1 - 3 8, 5 25 , 6 57 - 7 1 ,5 2 4, 6 43 - 7 3, 3 49 , 0 51 - 6 6 ,7 2 1, 9 15 - 5 5, 5 13 , 7 01 - 4 3 ,5 4 0, 4 68 - 3 9, 2 58 ,5 5 7 - 3 7 , 8 3 3, 7 9 8

NPV- Alternative A A$ -37,833,798

Datafor G raphsLife of Mine units T ota l 201 1 2 012 201 3 2 014 201 5 20 16 201 7 20 18 201 9

Ore Production 0 0 0 60 0,00 0 1 ,000 ,0 0 0 1 , 00 0 ,0 0 0 1 , 00 0 ,0 00 70 0,00 0 0

He a dg rade 0.0 0.0 0.0 1.3 1.5 1 .6 1.7 1 .1 0.0

Conta ine dg oldm ined 0 0 0 2 5,08 0 48 ,2 32 5 1, 44 7 54 ,6 62 2 4,75 9 0

Gold produced 0 0 0 1 8,81 0 38 ,5 85 4 1, 15 8 43 ,7 30 1 9,80 7 0

Gold price F ore cast 1 ,0 00 1,00 0 1 ,0 00 1,00 0 1 ,0 00 1,00 0 1 ,0 00 1,00 0 1 ,0 0 0

Gold sold 0 0 0 1 7,72 5 37 ,4 44 4 1, 00 9 43 ,5 81 2 1, 18 7 1 ,1 4 3

C as hs tr ea m 1 : R ev en ue - A lt er na ti ve A 0 0 0 1 6, 26 8, 22 4 3 5, 82 3,5 8 7 4 0, 7 16 , 15 4 4 3 ,3 70 ,0 73 2 3, 02 7, 86 1 2 ,8 8 4 ,1 3 3

Ca shstre a m 2 : Ca pita l Costs -Alte rna tiveA -3 ,000 ,0 0 0 - 4 0, 0 00 , 00 0 - 4 0, 0 00 ,0 0 0 - 6 ,0 0 0, 0 00 - 6 ,0 00 ,0 0 0 - 2 ,0 0 0, 0 00 - 1 ,0 00 ,0 00 0 0

Ca shstre a m 3 : Ope ra ting Costs - Alte rna tiveA -1 03,60 0,00 0 0 0 0 -14,90 0,00 0 -22 ,500 ,0 0 0 - 2 3, 5 00 , 00 0 - 2 4, 5 00 ,0 00 -1 8, 20 0, 00 0 0

Ca shstre a m 4 : T a xe s - Alte rna tiv e A 0 0 0 2,24 3,38 7 2 ,046 ,2 6 6 1 , 89 8 ,4 5 8 1 , 87 5 ,3 22 2 ,7 98 ,4 74 -1 4 3 ,5 4 7

Ca shflow ifpositiv e 0 0 0 0 9 ,369 ,8 5 3 1 7, 1 14 , 61 2 1 9 ,7 45 ,3 95 7 ,6 26 ,3 35 2 ,7 4 0 ,5 8 5

Cashflow Deficit 3 ,000 ,0 0 0 4 0, 0 00 , 00 0 4 0 ,0 00 ,0 00 2,38 8,38 8 0 0 0 0 0

Cash Flow -3 ,000 ,0 0 0 - 4 0, 0 00 , 00 0 - 4 0, 0 00 ,0 0 0 - 2 ,3 8 8, 3 88 9 , 36 9 ,8 5 3 1 7, 1 14 , 61 2 1 9 ,7 45 ,3 95 7 ,6 26 ,3 35 2 ,7 4 0 ,5 8 5

Discounte d Ca shflow- Alte rna tiv e A -2 ,886 ,7 5 1 - 3 5, 6 38 , 90 6 - 3 2, 9 98 ,9 8 7 - 1 ,8 2 4, 4 07 6 , 62 7 ,1 3 6 1 1, 2 08 , 21 4 1 1 ,9 73 ,2 32 4 ,2 81 ,9 12 1 ,4 2 4 ,7 5 9

Cum ula tive NPV - Alte rna tiveA -2 ,886 ,7 5 1 - 3 8, 5 25 , 65 7 - 7 1, 5 24 ,6 4 3 - 7 3, 3 49 , 05 1 - 6 6, 7 21 ,9 1 5 - 5 5, 5 13 , 70 1 - 4 3, 5 40 ,4 68 -3 9 , 25 8 , 55 7 - 3 7 ,8 3 3 ,7 9 8

Costpe rounce sold 792 5 89 57 2 5 61 87 8 8 78

Che ck 1 03,60 0,00 0 14,04 0,38 5 22 ,048 ,8 1 2 2 3, 4 52 , 85 8 2 4 ,4 42 ,9 72 1 8, 61 1, 19 4 1 ,0 0 3 ,7 7 9

Preta x marg in/oz 0 0 0 20 8 4 11 42 8 4 39 12 2 1 22

L if e of Mi ne un its To tal 2011 2012 2013 2014 2015 2016 2017 2018 2019

Cashstream1:ProductionandRevenueProduction13 Aug11 TBensonmine schedule "Mine Planfornew technology 12 Aug11"

O r e P r od u ct i on t o nn e s 4,300,000 6 0 0, 0 00 1 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 7 0 0, 0 00

H ea dg ra de g ra ms /t on ne 1.5 1.3 1.5 1.6 1.7 1.1

C on tai ne dgo ld mi ned ou nc es 20 4, 180 0 0 0 2 5, 080 48 ,23 2 51 ,44 7 54 ,66 2 24, 75 9 0

Processing Recovery %of contained gold 75% 80% 80% 80% 80%

Goldproduced ounces 162,090 0 0 0 18,810 38,585 41,158 43,730 19, 807 0


Goldin circuit weeks 0 3 3 3 3 3 3 3 3 3

Goldin circuit ounces 0 0 0 1,085 2,226 2, 374 2,523 1,143 0

Goldsold ounces 162,090 0 0 17,725 37,444 41,009 43,581 21, 187 1,143

Revenue23 Aug10 ABCCompany Forecastofgoldprice

G ol dp ri ce F ore cas t A $/ oun ce R ea l 10 00 1 00 0 1 00 0 1 000 10 00 10 00 10 00 1 00 0 1 00 0 1 00 0

G ol dR ev en ue A $ R ea l 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16

23 Aug11 J Gomachie: "SalesPlan: July 2011"

Debtors days 0 0 30 30 30 30 30 30 30 30

D ebt or s- Cl os in g A $ R ea l 0 0 1, 45 6, 856 3, 077 ,61 8 3, 370 ,61 5 3, 582 ,04 1 1 ,74 1, 417 0

Cashstream1:Revenue -AlternativeA $ R ea l 1 62 , 09 0, 0 32 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cashstream2:CapitalCosts10 Aug11 GDawsonemail"CapitalCostEstimate: Indicative EstimatesforNew Technologyroute"I n it i al C ap i ta l Co s ts A $ R e a l 83,000,000 3 , 0 0 0, 0 0 0 4 0 , 0 00 , 0 0 0 4 0 , 0 00 , 0 0 0

O n g oi n g C ap i t a l Co s t s A $ R e a l 15,000,000 6 , 0 0 0, 0 0 0 6 , 0 00 , 0 0 0 2 , 0 00 , 0 0 0 1 , 0 00 , 0 0 0

Cashstream2:Capital Costs-AlternativeA $ Re a l 9 8 ,0 0 0, 0 00 3 , 00 0 ,0 0 0 4 0 ,0 0 0, 0 00 4 0 ,0 0 0, 0 00 6 , 00 0 ,0 0 0 6 , 00 0 ,0 0 0 2 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 0 0

TaxdeductionsforCapitalExpenditure3 May11 EHermiAssume all capitalisdeductedinproportiontothe goldsoldoverthe life of mine.

T ax D ed uc ti on for Ca pi tal Ex pe nd itu re % of c ont ai ned go ld 11 % 2 3% 2 5% 2 7% 13 % 1 %

T ax d ed uc ti on fo rc ap it al e xp en di tu re 9 8, 00 0, 00 0 1 0, 71 6, 62 4 2 2, 63 8, 93 8 2 4, 79 4, 22 6 2 6, 34 9, 47 3 1 2, 80 9, 85 2 6 90 ,8 89

Cashstream3:OperatingCosts25 May11 GDawsonemail"OperatingCostEstimate: Indicative Estimatesfornew technology." There isnowaste tobe mined.

m i n i ng c o s t pe r t o nn e A $ R e al / t o nn e o r e 25 4 4 5 6 6

m in ing cos t A $ R ea l 21 ,60 0, 000 2, 40 0, 000 4, 000 ,00 0 5, 000 ,00 0 6, 000 ,00 0 4 ,20 0, 000 0

p r o c es s i n g co s t p er t o n ne A $ R e a l / t o nn e o r e 75 15 15 15 15 15


f ix ed co st s A $ R ea l 17,500,000 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0

Cashstream3:OperatingCosts-AlternativeA $ R ea l 1 03 , 60 0, 0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0costper ounce A$/ounce Real 792 583 571 560 919 0

Cashstream4:Taxes

GovernmentRoyaties2 June11 RTorply: SAStateRoyalty is1%ofrevenuepaidmonthly

State R oyalty %of r evenue 0. 0% 1.0% 1.0% 1.0% 1. 0% 1. 0% 1.0% 1.0% 1.0% 1.0%

S tat e R oyal ty A $ R ea l 1, 62 0, 900 0 0 0 17 7, 251 37 4, 443 4 10 ,09 2 4 35 ,81 5 2 11 ,87 2 1 1, 427

CompanyIncomeTax2 June 10 RTorply: CompanyIncome tax rate is 30%. The cashpaymentaveragesmidyear. Assume operatingcostcashstreamapproximatesthe costof goodssold.

G ol dR ev en ue 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16less

C a sh s tr e am 3 : O pe r at i ng C os t s- A l te r na t iv e A 1 03 , 60 0, 0 00 0 0 0 1 4 ,9 0 0, 0 00 2 2 ,5 0 0, 0 00 2 3, 5 00 , 00 0 2 4 ,5 0 0, 0 00 1 8 ,2 0 0, 0 00 0

T a x d e du c ti o nf o rc a pi t al e x pe nd i tu r e 9 8 ,0 0 0, 0 00 0 0 0 1 0 ,7 1 6, 6 24 2 2 ,6 3 8, 9 38 2 4, 7 94 , 22 6 2 6 ,3 4 9, 4 73 1 2 ,8 0 9, 8 52 6 9 0, 8 89

S tat e R oyal ty 1, 62 0, 900 0 0 0 17 7, 251 37 4, 443 4 10 ,09 2 4 35 ,81 5 2 11 ,87 2 1 1, 427

A ss es sa bl e I nc om e - 41 ,1 30 ,8 68 0 0 0 - 8, 06 8, 79 4 - 8, 06 9, 03 3 - 7, 69 5, 16 6 - 7, 70 3, 78 9 - 10 ,0 34 ,4 87 4 40 ,4 00

C om pa ny I nc om e T ax Ra te % of a ss es sa bl e i nc om e 0 . 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0%

I nc om e T ax - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

I nc om e t ax p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

Cashstream4:Taxes-AlternativeA $ R ea l - 1 0, 7 18 , 36 0 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 87 5, 32 2 - 2, 79 8, 47 4 1 43 ,5 47

CashflowandNPVCashlowsCashstream1: Revenue -Alternative A A$ Real 162,090,032 0 0 0 1 6, 26 8, 22 4 3 5, 82 3, 58 7 4 0, 71 6, 15 4 4 3, 37 0, 07 3 2 3, 02 7, 86 1 2 ,8 84 ,1 33Cashstream2: CapitalCosts-Alternative AA$ Real 98,000,000 3 ,0 00 ,0 00 4 0, 00 0, 00 0 4 0, 00 0, 00 0 6 ,0 00 ,0 00 6 ,0 00 ,0 00 2 ,0 00 ,0 00 1 ,0 00 ,0 00 0 0Cashstream3: OperatingCosts-Alternative AA$ Real 103,600,000 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0Cashstream4: Taxes-Alternative A A$ Real -10,718,360 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 87 5, 32 2 - 2, 79 8, 47 4 1 43 ,5 47

Cashflow-Alternative A A $ R ea l - 2 8, 7 91 , 60 8 - 3, 000, 000 - 40,000, 000 - 40,000, 000 - 2, 388, 388 9, 369, 853 17, 114, 612 19, 745, 395 7, 626, 335 2, 740, 585


Discounting17 July10 F Greenemail: discountrate forinvestmentingoldis8%Real. The base date is1 July2011

DiscountRate %Real 8% 8% 8% 8% 8% 8% 8% 8% 8%

DiscountFactor 0.96 0.89 0.82 0.76 0.71 0.65 0.61 0.56 0.52

D i s c o un t e d Ca s h fl o w - A l t e rn a t iv e A A $ R e a l - 3 7 ,8 3 3 , 79 8 - 2 , 88 6 , 7 51 - 3 5 , 63 8 , 9 06 - 3 2 , 99 8 , 9 87 - 1 , 8 24 , 4 0 7 6 , 6 27 , 1 3 6 1 1 , 20 8 , 2 14 1 1 , 9 73 , 2 3 2 4 , 2 8 1, 9 1 2 1 , 4 2 4, 7 5 9

C u mu l at i ve N P V- A lt e rn a ti v e A A $ - 2 ,8 8 6, 7 51 - 3 8, 5 25 , 65 7 - 7 1, 5 24 , 64 3 - 7 3, 3 49 , 05 1 - 6 6, 7 21 , 91 5 - 5 5, 5 13 , 70 1 - 4 3, 5 40 , 46 8 - 39 , 25 8 ,5 57 - 3 7, 8 33 , 79 8

NPV-Alternative A A$ -37,833,798

Datafor GraphsLife ofM ine units Total 2 01 1 2 01 2 2 01 3 2 01 4 2 01 5 2 01 6 2 01 7 2 01 8 2 01 9

O re P ro du ct io n 0 0 0 6 0 0, 00 0 1, 00 0, 00 0 1, 00 0, 00 0 1, 00 0,0 00 7 00 ,0 00 0

Head gr ade 0.0 0.0 0.0 1.3 1.5 1.6 1.7 1.1 0.0

C on ta in ed go ld mi ne d 0 0 0 25 ,0 80 48 ,2 32 51 ,4 47 54 ,6 62 2 4, 75 9 0

Go ld pr od uc ed 0 0 0 18 ,81 0 38 ,58 5 41 ,15 8 4 3,7 30 1 9, 80 7 0

G ol dp ri ce F or ec as t 1 ,0 00 1 ,0 00 1 ,0 00 1 ,0 00 1 ,0 00 1 ,0 00 1 ,0 0 0 1 , 00 0 1 , 00 0

Goldsold 0 0 0 17,725 37,444 41,009 43,5 8 1 2 1 ,1 8 7 1 , 14 3

C a sh s tr e am 1 : Re v en u e - A l te r na t iv e A 0 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0,0 7 3 2 3 , 02 7 , 8 61 2 , 8 8 4, 1 3 3

Cashstream2:CapitalCosts- Alternativ e A - 3, 00 0, 00 0 -4 0, 00 0, 00 0 -4 0,0 0 0 , 00 0 - 6 , 0 00 , 0 0 0 - 6 , 0 00 , 0 0 0 - 2 , 0 00 , 0 0 0 - 1 , 0 00 ,000 0 0Cashstream3:OperatingCosts-A l te r na t iv e A - 1 03 , 60 0 ,0 0 0 0 0 0 - 1 4, 9 00 , 00 0 - 2 2 , 50 0 ,0 0 0 - 2 3 ,5 0 0, 0 00 - 2 4, 5 00 ,0 0 0 - 1 8 ,2 0 0, 0 00 0

Cashstream4:Taxes -A lt er na ti ve A 0 0 0 2 , 24 3, 38 7 2 ,0 46 ,2 66 1 , 89 8, 45 8 1 ,8 75 ,3 2 2 2 , 7 9 8, 4 7 4 - 1 4 3 ,5 4 7

Cashflowi f p os it iv e 0 0 0 0 9, 36 9, 85 3 1 7, 11 4, 61 2 1 9, 74 5,3 9 5 7 , 6 2 6, 3 3 5 2 , 7 4 0, 5 8 5

CashflowD ef ic it 3 ,0 00 ,0 00 4 0, 00 0, 00 0 4 0,0 00, 000 2 ,3 88 ,38 8 0 0 0 0 0

C as hF lo w - 3, 00 0, 00 0 - 40 ,0 00 ,0 00 - 40 ,0 0 0 , 00 0 - 2 , 3 88 , 3 8 8 9 , 3 69 , 8 5 3 1 7 , 1 14 , 6 1 2 1 9 , 74 5 ,3 9 5 7 , 6 2 6, 3 3 5 2 , 7 4 0, 5 8 5

D i s co u n t ed C a s hf l o w - A l t e r na t i v e A - 2 , 8 86 , 7 51 - 3 5 , 6 3 8 ,9 0 6 - 3 2 ,9 9 8 , 98 7 - 1 , 8 24 , 4 0 7 6 , 6 27 , 1 3 6 1 1 , 2 08 , 2 1 4 1 1 , 97 3 ,2 3 2 4 , 2 8 1, 9 1 2 1 , 4 2 4, 7 5 9

Cumulative NPV- AlternativeA - 2, 88 6, 75 1 - 38 ,5 25 ,6 57 - 71 ,5 2 4 , 64 3 - 7 3 , 34 9 , 05 1 - 6 6 , 72 1 , 91 5 - 5 5 , 51 3 , 70 1 - 4 3 , 54 0 ,4 6 8 - 3 9 , 25 8 , 5 57 - 3 7 , 83 3 , 7 98

Costperouncesold 792 5 89 57 2 5 61 8 78 8 78

C hec k 1 03 ,60 0,0 00 1 4, 04 0, 38 5 22 ,0 48 ,8 12 2 3, 45 2, 85 8 24 ,4 42 ,9 7 2 1 8 , 61 1 , 1 94 1 , 0 0 3, 7 7 9

Pretax margin/oz 0 0 0 2 08 4 11 4 28 4 39 1 22 1 22

L if e o f Mi ne u ni ts Tot al 2011 2012 2013 2014 2015 2016 2017 2018 2019

Cashstream1:ProductionandRevenueProduction13 Aug11 TBensonmine schedule "Mine Planfornew technology 12 Aug11"

O r e P r od u ct i on t o nn e s 4,300,000 6 0 0, 00 0 1 , 00 0 ,0 00 1 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 7 0 0, 0 00H ea d gr a de g r am s /t o nn e 1.5 1.3 1.5 1.6 1.7 1.1

Co nt ai ned gol dmi ned o un ces 2 04 ,18 0 0 0 0 25 ,08 0 48, 23 2 5 1,4 47 5 4,6 62 2 4,7 59 0

ProcessingRecovery % of containedgold 75% 80% 80% 80% 80%Gold produced ounces 162,090 0 0 0 18,810 38,585 41,158 43,730 19,807 0


Gold in circuit weeks 0 3 3 3 3 3 3 3 3 3Gold in circuit ounces 0 0 0 1,085 2,226 2,374 2,523 1,143 0

Gold sold ounces 162,090 0 0 17,725 37,444 41,009 43,581 21,187 1,143

Revenue23 Aug 10 ABCCompany Forecast ofgoldprice

Gol dpr ic e F or ec ast A$ /ou nc e R eal 1 00 0 10 00 10 00 10 00 100 0 1 00 0 1 00 0 1 000 10 00 10 00G ol d Re ve nu e A $ Re al 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16

23 Aug 11 J Gomachie: "SalesPlan: July 2011"Debtors days 0 0 30 30 30 30 30 30 30 30

Deb to rs -Cl os ing A$ R eal 0 0 1,4 56 ,85 6 3 ,07 7, 618 3 ,37 0,6 15 3 ,58 2,0 41 1, 741 ,4 17 0

Cashstream1:Reven ue -Alternative AA $ R e al 1 6 2, 09 0 ,0 3 2 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cashstream2:CapitalCosts10 Aug11 GDawsonemail"CapitalCostEstimate: Indicative EstimatesforNew Technologyroute"I n it i al C ap i ta l Co s ts A $ R e al 83,000,000 3 , 0 00 , 0 00 4 0 , 00 0 , 00 0 4 0 , 00 0 , 00 0

O n g oin g C ap it alC o st s A $ R e a l 15,000,000 6 , 0 00 , 0 00 6 , 0 00 , 0 00 2 , 0 00 , 0 00 1 , 0 00 , 0 00

Cashstream2:Capi tal Costs-Al ternative AA $ R e al 9 8 ,0 0 0, 00 0 3 , 00 0 ,0 0 0 4 0 ,0 0 0, 0 00 4 0 ,0 0 0, 0 00 6 , 00 0 ,0 0 0 6 , 00 0 ,0 0 0 2 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 0 0

Tax deductionsforCapitalExpenditure3 May11 EHermiAssume allcapitalisdeductedinproportiontothe goldsoldoverthe life of mine.

Tax Ded uc ti on fo rC ap ita lExp en di tur e %of c ont ai ne dg ol d 1 1% 2 3% 25 % 27 % 13 % 1%

T ax d e du c ti o nf o rc a pi t al e xp e nd i tu r e 9 8 ,0 0 0, 00 0 1 0 ,7 16 , 62 4 2 2 ,6 3 8, 93 8 2 4 ,7 9 4, 22 6 2 6 ,3 4 9, 4 73 1 2 ,8 0 9, 8 52 6 9 0, 8 89

Cashstream3:OperatingCosts

25 May11 GDawsonemail"OperatingCostEstimate: Indicative Estimatesfornew technology." There isnowaste tobe mined.m in in g co st p e r t on n e A $ R e a l/ t o n ne o r e 25 4 4 5 6 6

m in in gc os t A $ R ea l 2 1, 60 0, 00 0 2 ,4 00 ,0 00 4 ,0 00 ,0 00 5 ,0 00 ,0 00 6 ,0 00 ,0 00 4 ,2 00 ,0 00 0p r o ce ss ing co st pe r t o nn e A $ R e a l/ t o n ne o r e 75 15 15 15 15 15


f ix ed co st s A $ Re al 17,500,000 3 , 5 00 , 0 00 3 , 5 00 , 0 00 3 , 5 00 , 0 00 3 , 5 00 , 0 00 3 , 5 00 , 0 00

Cashstream3:Operati ngCosts- Alternative AA $ R ea l 1 03 ,6 00 ,0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0cost perounce A$/ounce Real 792 583 571 560 919 0

Cashstream4:Taxes

GovernmentRoyaties

2 June11 R Torply: SAStateRoyalty is1% ofrevenuepaidmonthlySt ate R oya lty % of r eve nu e 0.0 % 1. 0% 1. 0% 1.0 % 1.0 % 1 .0 % 1 .0% 1 .0% 1. 0% 1. 0%

St ate R oya lty A$ R eal 1,6 20 ,90 0 0 0 0 1 77 ,25 1 3 74 ,44 3 4 10, 09 2 43 5,8 15 21 1,8 72 11 ,42 7

CompanyIncomeTax2 June 10 RTorply: CompanyIncome tax rate is30%. The cashpaymentaveragesmidyear. Assume operatingcostcashstreamapproximatesthe costof goodssold.G ol d Re ve nu e 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16lessC a sh s tr e am 3 : O p er a ti n gC o st s - Al t er n at i ve A 1 0 3, 60 0 ,0 0 0 0 0 0 1 4 ,9 00 , 00 0 2 2 ,5 0 0, 00 0 2 3 ,5 0 0, 00 0 2 4 ,5 0 0, 0 00 1 8 ,2 0 0, 0 00 0

T ax d e du c ti o nf o rc a pi t al e xp e nd i tu r e 9 8 ,0 0 0, 00 0 0 0 0 1 0 ,7 16 , 62 4 2 2 ,6 3 8, 93 8 2 4 ,7 9 4, 22 6 2 6 ,3 4 9, 4 73 1 2 ,8 0 9, 8 52 6 9 0, 8 89

St ate R oya lty 1,6 20 ,90 0 0 0 0 1 77 ,25 1 3 74 ,44 3 4 10, 09 2 43 5,8 15 21 1,8 72 11 ,42 7A ss es sa bl e I nc om e - 41 ,1 30 ,8 68 0 0 0 - 8, 06 8, 79 4 - 8, 06 9, 03 3 - 7, 69 5, 16 6 - 7, 70 3, 78 9 - 10 ,0 34 ,4 87 4 40 ,4 00

C om pa ny In co me T ax R at e % of a ss es sa bl e in co me 0 .0 % 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0%I nc om e T ax - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

I nc om e t ax p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

Cashstream4:Taxes -Alternative AA $ R ea l - 10 ,7 18 ,3 60 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 87 5, 32 2 - 2, 79 8, 47 4 1 43 ,5 47

CashflowandNPVCashlowsC a sh s tr e am 1 : Re v en u e -A l te r na t iv e A A $ R ea l 1 6 2, 0 90 , 03 2 0 0 0 1 6 ,2 68 , 22 4 3 5 ,8 2 3, 58 7 4 0 ,7 1 6, 15 4 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 ,8 8 4, 13 3

C a sh s tr e am 2 : C a pi t al C o st s - Al t er n at i ve A A$ R e al 9 8 ,0 0 0, 0 00 3 , 00 0 ,0 0 0 4 0 ,0 0 0, 0 00 4 0 ,0 0 0, 0 00 6 ,0 0 0, 00 0 6 , 00 0 ,0 00 2 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 0 0

Cashstream3: OperatingCosts-Alternative AA $ R ea l 1 03 ,6 00 ,0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0

C a sh s tr e am 4 : T a xe s - Al t er n at i ve A A $ R e al - 1 0, 7 18 , 36 0 0 0 0 - 2 ,2 4 3, 3 87 - 2 ,0 4 6, 2 66 - 1, 8 98 , 45 8 - 1 ,8 7 5, 32 2 - 2 ,7 9 8, 47 4 1 4 3, 5 47

Cashflow- Alternative A A $ R e a l - 2 8 ,7 9 1 ,6 0 8 - 3 , 0 00 , 0 0 0 - 4 0 ,0 0 0 ,0 0 0 - 4 0 ,0 0 0 ,0 0 0 - 2 , 38 8 , 3 88 9 , 3 69 , 8 53 1 7 , 11 4 , 6 12 1 9 , 74 5 , 3 95 7 , 6 2 6, 3 3 5 2 , 7 40 , 5 8 5

I RR -Al te rn at iv e A - 9. 4%

Discounting17 July10 F Greenemail: discountrate forinvestmentingoldis8%Real. The base date is1 July2011

Discount Rate % Real 8% 8% 8% 8% 8% 8% 8% 8% 8%Discount Factor 0.96 0.89 0.82 0.76 0.71 0.65 0.61 0.56 0.52

D iscou n t ed C a shf lo w - A lt er n a tiv e A A $ R e a l - 3 7 ,8 3 3 ,7 9 8 - 2 , 88 6 , 75 1 - 3 5 ,6 3 8 ,9 0 6 - 3 2 ,9 9 8 ,9 8 7 - 1 , 82 4 , 40 7 6 , 6 27 , 1 36 1 1 , 20 8 , 21 4 1 1 , 97 3 , 23 2 4 , 2 81 , 9 12 1 , 4 24 , 7 59C u m ula t ive N P V- Alt e rn a t ive A A $ - 2 , 88 6 , 75 1 - 3 8 ,5 2 5 ,6 5 7 - 7 1 ,5 2 4 ,6 4 3 - 7 3 ,3 4 9 ,0 5 1 - 6 6 ,7 2 1 ,9 1 5 - 5 5 ,5 1 3 ,7 0 1 - 4 3 ,5 4 0 ,4 6 8 - 3 9 ,2 5 8 ,5 5 7 - 3 7 ,8 3 3 ,7 9 8

NPV-Alternative A A$ -37,833,798

Datafor GraphsLifeof Mine units Total 2011 2012 2013 2014 2015 2016 2017 2018 2019

O reProduction 0 0 0 600,0 00 1 ,0 00 ,0 00 1 ,0 00 ,0 00 1 ,0 00, 000 7 00 ,00 0 0Headgrade 0.0 0.0 0.0 1.3 1.5 1.6 1.7 1.1 0.0

Contained goldmined 0 0 0 2 5,080 48,232 51,447 54,662 24,759 0

Gold produced 0 0 0 18,810 38,585 41,158 43,730 19,807 0Gold priceForecas t 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Gold s old 0 0 0 17,7 25 3 7, 444 4 1, 009 4 3, 581 21 ,18 7 1 ,14 3

Cas hs tream1: Revenue -Alternative A 0 0 0 16,268,2 24 3 5, 82 3, 58 7 4 0, 71 6, 15 4 4 3,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cas hs tream2 : Ca pi ta l C os t s - A lt er na ti ve A - 3, 00 0, 00 0 - 40 ,0 00 ,0 00 - 40 ,0 00 ,0 00 - 6, 00 0,0 00 - 6, 00 0, 00 0 - 2, 00 0, 00 0 - 1,000,000 0 0Cas hs tream3: O peratingCos ts- AlternativeA -103,600,000 0 0 0 -14,900,0 0 0 - 2 2, 5 00 , 00 0 - 2 3, 5 00 , 00 0 - 2 4,5 00 ,0 00 - 18 ,2 00 ,0 00 0

Cas hs tream4: Taxes - AlternativeA 0 0 0 2,243,3 87 2 ,0 46 ,2 66 1 ,8 98 ,4 58 1 ,8 7 5, 3 22 2 , 79 8 ,4 7 4 - 1 43 , 54 7

Cas hflow if pos itive 0 0 0 0 9,369,853 17,114,612 19,7 4 5, 3 95 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

Ca sh fl ow D ef ici t 3, 000 ,0 00 4 0, 000 ,00 0 4 0, 000 ,00 0 2 ,38 8,388 0 0 0 0 0Ca sh Fl ow - 3, 000 ,0 00 - 40, 000 ,00 0 - 40, 000 ,00 0 - 2, 38 8,3 88 9 ,3 69 ,8 53 1 7, 11 4, 61 2 1 9,7 4 5, 3 95 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

Dis counted Cas hflow- A lt er na ti ve A - 2, 88 6, 75 1 - 35 ,6 38 ,9 06 - 32 ,9 98 ,9 87 - 1, 82 4,4 07 6 ,6 27 ,1 36 1 1, 20 8, 21 4 1 1,9 7 3, 2 32 4 , 28 1 ,9 1 2 1 , 42 4 ,7 5 9CumulativeN PV - A lt er na ti ve A - 2, 88 6, 75 1 - 38 ,5 25 ,6 57 - 71 ,5 24 ,6 43 - 73 ,3 49 ,0 5 1 - 6 6, 7 21 , 91 5 - 5 5, 5 13 , 70 1 - 4 3,5 4 0, 4 68 - 3 9, 2 58 , 55 7 - 3 7, 8 33 , 79 8

Cos tperounce s old 792 589 572 561 878 878

Check 103,600,000 14,040,3 85 2 2, 04 8, 81 2 2 3, 45 2, 85 8 2 4,4 4 2, 9 72 1 8 ,6 1 1, 1 94 1 , 00 3 ,7 7 9

Pretaxmargin/oz 0 0 0 208 411 428 439 122 122

Life of Mine units Total 201 1 2012 2013 2014 2015 2016 2017 2018 2 019

Cashstream 1: Production and RevenueProduction13 Aug 11 TBenson mine schedule "Mine Plan fornew technology 12 Aug 11"O r e P r od u ct i on t o nn e s 4,300,000 6 0 0, 0 00 1 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 7 0 0, 0 00

H ea d g ra de g ra ms /t on ne 1.5 1. 3 1. 5 1. 6 1. 7 1.1C on tai ned g ol d m in ed ou nc es 20 4, 180 0 0 0 2 5, 080 4 8, 232 5 1, 447 5 4, 662 2 4, 759 0Processing Recovery % of contained gold 75% 80% 80% 80% 80%

Gold produced ounces 162,090 0 0 0 18,810 38,585 41,158 43,730 19,807 0


Gold in circuit weeks 0 3 3 3 3 3 3 3 3 3Gold in circuit ounces 0 0 0 1,085 2,226 2,374 2,523 1,143 0Gold sol d ounces 162,090 0 0 17,725 37,444 41,009 43,581 21,187 1,143

Revenue23 Aug 10 ABCCompany Forecast ofgo ld price

G ol d pri ce F ore cas t A $/ oun ce R ea l 10 00 1 00 0 1 00 0 1 00 0 1 00 0 1 00 0 10 00 10 00 10 00 10 00

G ol d R ev en ue A $ R ea l 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16


Debtors days 0 0 30 30 30 30 30 30 30 30D ebt or s- Cl os ing A $ R ea l 0 0 1 ,45 6, 856 3 ,07 7, 618 3 ,37 0, 615 3, 58 2, 041 1, 741 ,41 7 0

Cashstream 1:Revenue -AlternatiA $ R ea l 1 6 2, 0 90 , 03 2 0 0 1 6 ,2 6 8, 2 24 3 5 ,8 2 3, 5 87 4 0 ,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cashstream 2: Capital Costs10 Aug 11 G Dawson email "Capital CostEstimate: Indicative EstimatesforNew Technology route"I n it i al C a pi t al C o s ts A $ R ea l 83,000,000 3 , 0 00 , 0 0 0 4 0 , 0 00 , 0 0 0 4 0 , 0 00 , 0 0 0O n goi n g Ca p i ta l Co s t s A $ Re a l 15,000,000 6 , 0 0 0, 0 0 0 6 , 0 0 0, 0 0 0 2 , 0 0 0, 0 0 0 1 , 0 0 0, 0 0 0

Cashstream 2:Capital Costs -AltertiA $ R ea l 9 8, 00 0, 00 0 3 ,0 00 ,0 00 4 0, 00 0, 00 0 4 0, 00 0, 00 0 6 ,0 00 ,0 00 6 ,0 00 ,0 00 2 ,0 00 ,0 00 1 ,0 00 ,0 00 0 0

Tax deductions forCapital Expenditure3 May 11 E Hermi Assume all capital isdeducted in proportion to the gold sold overthe l ife of mine.Ta x D ed uc ti on for Ca pi tal Ex pe nd itu re % of c ont ai ned go ld 11 % 23 % 25 % 27 % 13% 1%

T ax d ed uc ti on f or ca pi ta l e x p en di tu re 9 8, 00 0, 00 0 1 0, 71 6, 62 4 2 2, 63 8, 93 8 2 4, 79 4, 22 6 2 6, 34 9, 47 3 1 2, 80 9, 85 2 6 90 ,8 89

Cashstream 3: Operating Costs

25 May 11 G Dawson email "Operating CostEstimate: Indicative Estimatesfornew technology." There isno waste to be mined.m i n i ng c o s t p er t o n ne A $ R e al / t o nn e o r e 25 4 4 5 6 6m in ing c os t A $ R ea l 21 ,60 0, 000 2 ,40 0, 000 4 ,00 0, 000 5 ,00 0, 000 6, 00 0, 000 4, 200 ,00 0 0

p r o c es s i n g c o s t pe r t o nn e A $ R e a l / t o nn e o r e 75 15 15 15 15 15p ro ce ss in g co st A $ Re al 6 4, 50 0, 00 0 9 ,0 00 ,0 00 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 5, 00 0, 00 0 1 0, 50 0, 00 0 0f ix ed co st s A $ R ea l 17,500,000 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0 3 , 50 0 ,0 0 0

C a sh st r ea m 3 : O p e r a t in g C o st s - l t r t iA $ R ea l 1 03 ,6 00 ,0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 0 00 0cost per ounce A$/ounce Real 792 583 571 560 919 0

Cashstream 4: Taxes

Government Royaties2 June11 RTorply: SAStateRoyalty is1% ofrevenuepaid monthly

State Roy alty % of rev enue 0. 0% 1.0% 1.0% 1.0% 1.0% 1.0% 1. 0% 1. 0% 1. 0% 1. 0%

S tat e Roy al ty A $ Rea l 1 ,62 0, 900 0 0 0 1 77, 25 1 37 4, 443 41 0, 092 43 5, 815 21 1, 872 11 ,42 7

Company Income Tax2 June 10 R Torply: Company Income tax rate is30%. The cash paymentaveragesmid year. Assume operating costcashstream approximatesthe costof goodssold.

G ol d R ev en ue 1 62 ,0 90 ,0 32 0 0 0 1 7, 72 5, 08 0 3 7, 44 4, 34 8 4 1, 00 9, 15 2 4 3, 58 1, 49 9 2 1, 18 7, 23 7 1 ,1 42 ,7 16lessC a sh s tr e am 3 : O pe r at i ng C o st s - Al t er n at i ve A 1 0 3, 6 00 , 00 0 0 0 0 1 4 ,9 0 0, 0 00 2 2 ,5 0 0, 0 00 2 3 ,5 0 0, 0 00 2 4 ,5 0 0, 0 00 1 8 ,2 0 0, 0 00 0T a x d e du c ti o n f o rc a pi t al e x pe n di t ur e 9 8 ,0 0 0, 0 00 0 0 0 1 0 ,7 1 6, 6 24 2 2 ,6 3 8, 9 38 2 4 ,7 9 4, 2 26 2 6 ,3 4 9, 4 73 1 2 ,8 0 9, 8 52 6 9 0, 8 89

S tat e R oy al ty 1 ,62 0, 900 0 0 0 1 77, 25 1 37 4, 443 41 0, 092 43 5, 815 21 1, 872 11 ,42 7A ss es sa bl e I nc om e - 41 ,1 30 ,8 68 0 0 0 - 8, 06 8, 79 4 - 8, 06 9, 03 3 - 7, 69 5, 16 6 - 7, 70 3, 78 9 - 10 ,0 34 ,4 87 4 40 ,4 00

C om pa ny In co me Ta x R at e % of as se ss ab le in co me 0 .0 % 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0% 3 0. 0%I nc om e T ax - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20I nc om e t ax p ay me nt - 12 ,3 39 ,2 60 0 0 0 - 2, 42 0, 63 8 - 2, 42 0, 71 0 - 2, 30 8, 55 0 - 2, 31 1, 13 7 - 3, 01 0, 34 6 1 32 ,1 20

Cashstream 4:Taxes -AlternativeA $ R ea l - 1 0, 7 18 , 36 0 0 0 0 - 2, 24 3, 38 7 - 2, 04 6, 26 6 - 1, 89 8, 45 8 - 1, 8 75 ,3 22 - 2, 79 8, 47 4 1 43 ,5 47

Cashflow and NPVCashlows

Cashstream 1: Revenue -Alternative AA$ Real 162,090,032 0 0 0 1 6, 26 8, 22 4 3 5, 82 3, 58 7 4 0, 71 6, 15 4 4 3, 37 0, 07 3 2 3, 02 7, 86 1 2 ,8 84 ,1 33

C a sh s tr e am 2 : C ap i ta l C o s ts - A lt e rn a ti v e A A $ R ea l 9 8 ,0 0 0, 0 00 3 , 00 0 ,0 0 0 4 0 ,0 0 0, 0 00 4 0 ,0 0 0, 0 00 6 , 00 0 ,0 0 0 6 , 00 0 ,0 0 0 2 , 00 0 ,0 0 0 1 , 00 0 ,0 0 0 0 0

Cashstream 3: Operating Costs-AlternativeA $ R ea l 1 03 ,6 00 ,0 00 0 0 0 1 4, 90 0, 00 0 2 2, 50 0, 00 0 2 3, 50 0, 00 0 2 4, 50 0, 00 0 1 8, 20 0, 00 0 0

C a sh s tr e am 4 : T ax e s -A l te r na t iv e A A $ R e al - 1 0, 7 18 , 36 0 0 0 0 - 2, 2 43 , 38 7 - 2, 0 46 , 26 6 - 1 ,8 9 8, 4 58 - 1 ,8 7 5, 3 22 - 2 ,7 9 8, 4 74 1 4 3, 5 47

Cashflow -Alternative A A $ R e al - 2 8, 7 91 , 60 8 - 3 ,0 0 0, 0 00 - 4 0, 0 00 , 00 0 - 4 0, 0 00 , 00 0 - 2 ,3 8 8, 3 88 9 , 36 9 ,8 5 3 1 7 ,1 1 4, 6 12 1 9 ,7 4 5, 3 95 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

I RR - Al te rn at iv e A - 9. 4%

Discounting

17 July 10 F Green email: discountrate forinvestmentin gold is8% Real. The base date is 1 July 2011Discount Rate % Real 8% 8% 8% 8% 8% 8% 8% 8% 8%Discount Factor 0. 96 0. 89 0. 82 0.76 0.71 0.65 0.61 0.56 0.52

D i s c ou n t ed C a s hf l o w - A l t er n a ti ve A A $ R e a l - 3 7 ,8 3 3 , 79 8 - 2 , 88 6 , 7 51 - 3 5 ,6 3 8 , 90 6 - 3 2 ,9 9 8 ,9 8 7 - 1 , 82 4 , 4 07 6 , 6 2 7, 1 3 6 1 1 , 20 8 , 2 14 1 1 , 97 3 , 2 32 4 , 2 81 , 9 1 2 1 , 4 24 , 7 5 9C u mu l at i ve N P V -A l te r na t iv e A A $ - 2 ,8 8 6, 7 51 - 38 , 52 5, 6 57 - 71 , 52 4 ,6 4 3 - 7 3, 3 49 , 05 1 - 6 6, 7 21 , 91 5 - 5 5, 5 13 , 70 1 - 4 3, 5 40 , 46 8 - 3 9, 2 58 , 55 7 - 3 7, 8 33 , 79 8

NPV - Alternative A A$ -37,833,798

Datafor GraphsLife ofMine units Total 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ore Production 0 0 0 600,000 1,000,000 1,0 00 ,0 00 1 ,0 00 ,0 00 7 00 ,0 00 0

Head grade 0.0 0.0 0.0 1.3 1.5 1.6 1.7 1.1 0.0

Contained g old m ined 0 0 0 25,080 48,232 51,447 54,662 24,759 0

Gold produced 0 0 0 18,810 38,585 41,158 43,730 19,807 0

Gold price Forecast 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Gold sold 0 0 0 17,725 37,444 41,009 43,581 21,187 1,143

C as hs tr eam 1: R ev en ue - A lt er na ti ve A 0 0 0 16 ,26 8, 224 3 5, 82 3, 587 4 0,7 1 6, 1 54 4 3 ,3 7 0, 0 73 2 3 ,0 2 7, 8 61 2 , 88 4 ,1 3 3

Cashstream 2: Capital Costs - AlternativeA -3,000,0 00 - 40 ,0 00 ,0 00 - 40 ,0 00 ,0 00 - 6, 00 0, 00 0 - 6, 00 0, 00 0 - 2,000,000 -1,000,000 0 0

Cashstream 3: O peratingCosts -A lt er na ti ve A - 103 ,6 00 ,00 0 0 0 0 - 14 ,90 0, 000 - 22 ,50 0, 000 - 23 ,5 00 ,0 00 - 24 ,5 00 ,0 00 - 18 ,2 00 ,0 00 0

Cashstream 4: Taxes - Alternative A 0 0 0 2,243,387 2,046,266 1,8 9 8, 4 58 1 , 87 5 ,3 2 2 2 , 79 8 ,4 7 4 - 1 43 , 54 7

Cashflowif positive 0 0 0 0 9,369,853 17,1 1 4, 6 12 1 9 ,7 4 5, 3 95 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

CashflowDefic it 3,000,0 00 4 0, 00 0,000 40,000,000 2,388,388 0 0 0 0 0

Cas h Flow -3,000,0 00 - 40 ,0 00 ,0 00 - 40 ,0 00 ,0 00 - 2, 38 8, 38 8 9 ,3 69 ,8 53 1 7,1 1 4, 6 12 1 9 ,7 4 5, 3 95 7 , 62 6 ,3 3 5 2 , 74 0 ,5 8 5

DiscountedCashflow - Alt ernative A -2,886,7 51 - 35 ,6 38 ,9 06 - 32 ,9 98 ,9 87 - 1, 82 4, 40 7 6 ,6 27 ,1 36 1 1,2 0 8, 2 14 1 1 ,9 7 3, 2 32 4 , 28 1 ,9 1 2 1 , 42 4 ,7 5 9

CumulativeNPV - AlternativeA -2,886,7 5 1 - 3 8, 5 25 , 65 7 - 7 1, 5 24 , 64 3 - 7 3, 3 49 , 05 1 - 6 6, 7 21 , 91 5 - 5 5,5 1 3, 7 01 - 4 3, 5 40 , 46 8 - 3 9, 2 58 , 55 7 - 3 7, 8 33 , 79 8

Cost perouncesold 792 589 572 561 878 878

Check 103,600,000 14,040,385 22,048,812 23,4 5 2, 8 58 2 4 ,4 4 2, 9 72 1 8 ,6 1 1, 1 94 1 , 00 3 ,7 7 9

Pretax margin/ oz 0 0 0 208 411 428 439 122 122

results accountingproduction,

sales,revenue

capex opexTaxes &

govtroyalties

Cash flowNPV, IRR,

etc

WorkedExample- ForWebsite

Results

AlternativeANPV-AlternativeAA $ 4 ,5 61 ,8 33

IRR- Alternativ eAReal 9.7%

-50

-40

-30

-20

-10

0

10

20

30

40

50

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024A$M

AlternativeA-Four CashStreams

C a s h st r e am2 :C a pi t a l C os t s - A l te r n a ti v e A C a s h fl o w De fi c i t C a s h st r e am3 :O p er a t i ngC o s t s - Al t e r na t i ve A C a s h fl o w i f po s i t i ve C a s h st r e am4 :T a xe s - A l t er n a t iv e A

-80

-60

-40

-20

0

20

40

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

A$M

AlternativeA-NPV

D i s co u n te d C a sh fl ow -A l t er n a ti v e A C u mul a ti v e N P V-A lt e rn a t iv e A

0

1

2

3

4

5

6

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0 2 02 1 2 02 2 2 02 3 2 02 4

AuGrams/Tonne


AlternativeA-Mining

O re Pr odu ct ion H ea dgr ad e

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0 2 02 1 2 02 2 2 02 3 2 02 4A$

AlternativeA-Opex

m in in gc os t p ro ce ss in gc os t f ix ed co st s

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

2 01 5 2 01 6 2 01 7 2 01 8 2 01 9 2 02 0 2 02 1 2 02 2 2 02 3 2 02 4

A$

AlternativeA-Capex

I n it i al C a pi t al C os t s O n go i ng C ap i ta l C o st s

0

500

1,000

1,500

2,000

2,500

0

20

40

60

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

$/ounce

GoldOunces(000's)

AlternativeA-Sales, Price, Margin

G o l d so l d G o l d pr i ce Fo r eca s t P r e ta xmar g i n/o z

0

1

2

3

4

5

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9

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

A$M

Tax-AlternativeA

S ta te Ro ya lt y I nc om eTa x

WorkedExample- ForWebsiteContact

PeterCard0407508924

Purpose

This'WorkedExample'illustratesthe economicevaluationmodellingpracticesrecommendedbyAusIMM

Itcomparesa goldmineusingexistingcommon technologywithanew technology-atconceptlevel

Warnings

Thisexampleisan illustration. Ithasnot beenauditedandshouldbe checkedbeforebeingused.

AuditsS e lf a u di t P C ar d Yettobecompletedexistin g case DMar tin Yettobecompleted

newtechcase GDarwinYettobecompleted

taxes GWise Yettobecompleted

exter nalp eer CCaseyYettobecompleted

SimplifiedtofourcashstreamsEachevaluationissimplifiedintofourstreams:Revenue,OperatingCosts,CapitalCostsandTaxes. Accountingcanbederivedfromthese.

Understandingthecolourcoding13Aug2011BWhite,"Sales PlanforOperations to2025"

67.4 Everyitemofinput datais exposedinacell usingbluefont onabluebackground

It has its source,dateandpersoninbluefont intherowimmediatelyabove.(Not as ahiddencell note)

6 7. 4 2 02 .2 Anyitemthat is dubious orneedingverificationis inpinkfont

Everyitemwhich is referencedacross fromanotherworksheet is ingreenfo nt ongreenbac kground.

r e co v er y % s il ve r 3 6 % 3 6 % Thecompleterowis referencedacross includingits titleincolumnAas acheckthat thecorrect datais beingreferenced.

Ifareferencedcell is inColumnBinthesourceworksheet thenit appears inthesamecolumn(B)inthis worksheet.(this greatlyreduces errrs)

Thereforeif2013is incolumnKinoneworksheet thenit is incolumnKineveryotherworksheet

134.8 Everyalgorithmmust usecells onlyfromthis worksheet.(It does not referencedatainanotherworksheet,norcontainhiddenfreshdata)

134.8 Computational algorithms shouldnot changeacross arow.If thereis anexceptionit shouldbehighlightedwithadarkborder

67.4 Somepeopleus eitalics fornomin al terms dataandvertic al font forreal terms data



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i. Six principlesii. Four cashstreamsiii. Worked examples

iv. Three golden rules


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1.

Easy to follow

2. Tailored to purpose

3.

Transparent

4.

Disciplined, rigorous and consistent

5. Recording all sources of data

6. Rapid to audit

These are described on the AusIMM Websitewww.ausimm.com.au/content/docs/guidelines_tech_economic_evaluation.pdf


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Cashstream 1: Production and RevenueProduction10 Aug11 TBe nsonmine schedule "Mine Plan12 June 11"






Sales23 Aug11 JGomachie: "SalesPlan: July2011"


1 a hands on modelling start here overview 2013-10-06

Documents