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Pilot Gold PEA

Recs

4

October 10, 2012 – Comments (5) | RELATED TICKERS: PPP , BRD.DL , CLGRF

Under the base case (Case A: $1,200/oz gold price and $2.90/lb copper price), the Project's pre-tax discounted net present value (NPV7%) is US$675 million with a pre-tax internal rate of return ("IRR") of 26% on an unleveraged 100% equity basis, and a pay-back period of only 2.1 years. The after-tax NPV7% is $474 million, with a 20% IRR and a 2.7 year payback. (See table below).

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----------------------------------------------------------------------- ----- Pre-Tax After-Tax Parameter Unit Results Results ---------------------------------------------------------------------------- Case A Base Case ($1,200/oz Au; $2.90/lb Cu) ---------------------------------------------------------------------------- NPV0% M$ 1,418 1,115 NPV7% M$ 675 474 IRR % 26 20 Payback Period Years 2.1 2.7 ---------------------------------------------------------------------------- Case B ($1,350/oz Au; $3.30/lb Cu) LME fixed 3 year average price ---------------------------------------------------------------------------- NPV0% M$ 2,099 1,660 NPV7% M$ 1,081 799 IRR % 35 27 Payback Period Years 1.5 2.1 ---------------------------------------------------------------------------- Case C ($1,500/oz Au; $3.70/lb Cu) LME fixed 2 year average price ---------------------------------------------------------------------------- NPV0% M$ 2,779 2,204 NPV7% M$ 1,487 1,124 IRR % 43 34 Payback Period Years 1.2 1.6 PEA Highlights - Case A ($1,200/oz Au; $2.90/lb Cu) ---------------------------------------------------------------------------- Total gold produced (payable) 1.290 million ounces ---------------------------------------------------------------------------- Total copper produced (payable) 1.247 billion pounds ---------------------------------------------------------------------------- Average gold grade 0.30 g/t ---------------------------------------------------------------------------- Average copper grade 0.28% ---------------------------------------------------------------------------- Average annual gold production (payable) 92,140 ounces ---------------------------------------------------------------------------- Average annual copper production (payable) 89,070,000 pounds ---------------------------------------------------------------------------- Life of mine 14 years ---------------------------------------------------------------------------- Net Pre-Tax Operating Income $2,587 million ---------------------------------------------------------------------------- Total Capital Cost $1,168 million (including mining pre-strip, equipment, mill and processing, infrastructure & site costs, tailings and waste facilities, buildings, owners' costs, and miscellaneous indirect costs, contingency of $200.4 million, sustaining capital of $51.6 million and closure costs of $75 million) ----------------------------------------------------------------------------

5 Comments – Post Your Own

#1) On October 11, 2012 at 1:14 PM, ath002 (< 20) wrote:

Hi Tdonb,

Some time ago SN was punting Pilot Gold when it was around a dollar, now it has risen considerably, do you still think it is a good investment?

Thanks in advance

Luis 

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#2) On October 11, 2012 at 1:51 PM, XMFSinchiruna (27.35) wrote:

Luis.... here are my $0.02:

http://caps.fool.com/Blogs/the-pilots-have-landed-on-the/762467

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#3) On October 11, 2012 at 5:38 PM, tdonb (38.44) wrote:

See Sinch's article above. He has done more research than I have, and he has a good way of describing his thoughts as well.

I think it is a good investment, but I also think it may get a bit cheaper at some point. You might want to take a small position now and see what happens for a while.

I'm currently looking at CGR for investment.

Thanks.

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#4) On October 13, 2012 at 2:09 AM, ath002 (< 20) wrote:

Hi Chris and Tdonb,

Thank you both for your comments, appreciate them.

Wish you both a good weekend, its raining in the south of Africa, always welcome.

Kind regards,

Luis 

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#5) On October 14, 2012 at 7:59 PM, shiftins (< 20) wrote:

Interesting share. And great blog btw TMF im definately following

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