Ann: Funding Package for Karlawinda Gold Project, page-43

@speculator101

Take a look at the feasibilty study presentation from Oct 2017 below (metrics have been improved since then) and in particular pages 7 to 16. The company divides capital expenses on page 14 from operational costs on page 15. There is no mention of pre-mining stripping cost. If you look at page 16 they have construction and commissioning over 5 quarters (15 months) with gold production starting after 4 quarters from commencent of construction (so gold production from 12 months after the start of construction).

You can see the expected ore stockpiles on page 11. They are showing the ore stockpile rising to >250kt within one quarter after commencement of production and page 7 shows the strip ratios and grades of the first stage pit which quickly reduce from 5.2:1 to 2.4:1. The average ore grade in this stage one pit is expected to be higher than the actual grade which GCY are now producing from their project and their forecast strip ratio is now sitting at 14:1. Ouch.

I think the company is trying to tell us that there are minimal stripping costs associated with this project or else they will have listed that cost in pre-mining capital costs. It’s not like they have just been left out to fool us or something.

I also noticed the use of the following language in this presentation.

“Thick, continuous and consistent ore zones”

“Comfortable mining rates, consistent material movement”

“Consistent scheduled material movement over LOM”

That is also where Bibra varies from Gilbey’s, the GCY depoists were alawys sensitive to maintaining high material movements due to the high stripping ratios in the first two years (I did warn eveyone) and when you combine that with grades in the first years showing 35% downward reconciliation, then you end up with all sorts of restless sleep and a “hope” based future. As we all know hope is not a good investment strategy.

I’m taking the capital costs and operating costs from the FS on face value at the moment, so I’m not predicting any extra costs.

Given my EV forward predictions for CMM based on the expected debt/equity split, GCY at 7 cents has roughly the same EV as GCY at the moment

EV CMM = $159.4 million, EV GCY = $156 million

I think CMM is far better value taking into account all the known risks/rewards (even considering GCY’s plant is built and all but complete). A project is only partially derisked once the plant is built. The project needs to be built and running to specifications to be totally derisked.

I’ll back this project to be completed with out too many hitches. Esh

http://capmetals.com.au/wp-content/uploads/2017/10/10_2017-CMM-DFS-Announcement.pdf