Projects

North Widgiemooltha Feasibility Study

A Definitive Feasibility Study (full details in ASX release dated 26 April 2017 - click here) confirmed the economic viability of a low capital cost start-up gold mining operation based on the extraction of shallow reserves across 10 open pits at North Widgiemooltha, with the ore to be treated via a toll-treatment arrangement at one of the many operating mills in the region.

Key DFS outcomes include a low upfront capital outlay of just A$2.8 million which is forecast to generate an undiscounted pre-tax cash flow at a flat A$1,600/ounce gold price of A$28.3 million, with a maximum cash drawdown of A$7.3 million. The project is forecast to recover a total of 65,863 ounces of gold over an initial mine of 19 months, assuming the treatment of 60,000 tonnes of ore per month. The Jeffrey's Find prospect was not included in the DFS. The DFS includes a maiden start-up Ore Reserve of 823,590 tonnes at 2.7 g/t Au for 72,580 ounces.

Widgiemooltha Gold Feasibility Study - key outcomes

PRODUCTION SUMMARYUnits

Life of Mine (LOM)

months

19

Strip ratio

waste: ore

6:1

Ore mined

tonnes

824,000

Average grade

g/t Au

2.7

Contained gold

ounces

72,600

Average LOM metallurgical recovery

%

90.7

Recovered gold

ounces

65,863

CAPITAL COSTSLOM

Pre-production capital

A$2.5M

Infrastructure capital

A$0.3M

Total capital costs

A$2.8M

PROJECT ECONOMICSLOMA$/oz

Revenue (gold price at $1,600/ounce)

$105.3M

$1,600

C1 cash costs(a)

$63.9M

$970

Royalties(b)

$7.7M

$118

Pre-production capital costs

$2.5M

$38

All-In Sustaining Costs (AISC)*

$74.1M

$1,126

Infrastructure capital

$0.3M

$5

Rehabilitation cost

$2.5M

$38

All-In Costs**

$77.0M

$1,169

Undiscounted cash flow (pre-tax)

$28.3M

NPV8%***

$25.7M

Maximum drawdown

$7.3M

Payback (months)

9

Notes:
Cost estimation has been completed to a +/- 15% accuracy level.
(a) C1 Cash Costs include all mining, processing, haulage, site administration and refining costs.
(b) Royalties include WA State royalty and third party royalty.
* AISC include C1 costs + royalties + pre-production capital costs.
** AIC include AISC + infrastructure capital costs + rehabilitation (excludes head office corporate costs)
*** NPV includes accumulated tax losses carried forward from prior years which was used to offset against profit generated from the project.

Project financials at various gold price scenarios

Gold price per ounceUndiscounted cash flow (pre-tax)NPV 8%Maximum drawdown

A$1,600

$28.3M

$25.7M

$7.3M

A$1,705#

$34.5M

$31.4M

$7.1M

A$1,800

$40.1M

$36.6M

$7.1M

# Spot gold price as at 19 April 2017