Financial Analysis

Establishment Capital Costs

The establishment costs for the Project amount to US$160 million based on written quotes from equipment suppliers, service providers and consumables in the Asia-Pacific region. These estimates were based on new equipment and include variable contingencies.

Establishment Capital Costs

Cost Centre
US$M
Processing Plant including Tailings

92

Infrastructure

20

Spares and First Fill

5

Owners Costs including Relocation

20

Pre Strip

8

Fixed Price Turnkey EPC

15

Establishment Capital Cost
160
Mining Fleet*1

36

Deferred Life of Mine Capital

16

Deferred Waste during Mine Ramp Up*2

11

*1 assuming owner operated fleet
*2 deferred waste after pre-strip is included in cash cost Y1

Project Operating Costs

Operating costs were based on written quotes for heavy fuel oil supply (the largest component of operating costs), services and consumables. Labour costs were estimated from industry survey and current PNG data.  PNG Government royalties are 2.25% of the value of the gold produced.

Operating Costs

Costs
Y1-6 US$M
LOM US$M
US$/t Milled
Y1-6
US$ per ounce Recovered
Y1-6
US$ per ounce Recovered
LOM Y1-9
Mining*1

183

212

16.74

271

261

Processing

239

356

21.92

355

438

Administration & General

70

92

6.44

104

113

Owners Costs

2

3

0.18

3

3

Sub Total
494
663
45.28
733
815
Refining Costs

2

3

0.21

3

3

Silver Credits

(4)

(5)

(0.37)

(6)

(6)

C1 Cash Costs
492
661
45.12
730
812
Royalties*2

27

32

2.43

40

39

Total Operating Costs*3
519
693
47.55
770
851

*1 owner operated fleet cash cost – excludes depreciation
*2 gold price US$1600/oz
*3 net of silver credits

Project Financial Summary

The financial model of the Woodlark Island Gold Project Feasibility Study indicates that at a gold price of US$1600 per ounce the pre-tax NPV is US$237 million and IRR is 34% at a discount rate of 7%.  After taking into account the PNG corporate tax rate of 30% including accumulated tax deductions the post-tax NPV is US$194 million and IRR is 31% at a discount rate of 7% and a gold price of US$1600 per ounce.

Financial Summary

Gold Price
US$1300 per ounce
Gold Price
US$1400 per ounce
Gold Price
US$1600 per ounce
Pre-tax NPV @ 7%* (Millions)
US$75 US$133 US$237
Pre-tax IRR
17% 23% 34%
Post-tax NPV @ 7%*Millions)
US$63 US$110 US$194
Post-tax IRR
16% 22% 31%
Payback
3.5 years 3.2 years 2.6 years