Ann: Ore now being extracted from Sol Plaatjies open pit-WWI.AX, page-61

Assumptions - gold price $1,300/oz - dollar amounts stated in USD unless stated otherwise

Okay, so allow me to attempt at untangling this web. Mining has started at Sol Plautjes Project, they're expecting to pull 130,000 tonnes of ore out in the next 12 months. Grade is good <4 g/t what does this mean?

The Sowest Project is now 66% owned by WWI. The contractors extracting the oar are going to get 0.4 grams per tonne as their earnings. 1.2g/t is reserved for estimated costs and 0.6g/t is WWI's royalty. If there is any surplus cash flow it will be split between the two.

With 130,000 tonnes @ 4 g/t they're possibly looking in the vicinity of 1.8 grams per tonne remaining for profit share or 7,500/oz @ $1,300 US an Oz $9.7m shared equally for $4.8m each WWI cut is $3.2m + 0.6 grams per tonne at $2.15mUSD? That would make a rough estimate, short of cost blowouts of net proceeds of $5.3mUSD after 66% cut. Not sure where the other 37% goes, 7% goes to the lawyers I know.

Not bad?

If WWI are getting $5.3m for 16,700 oz that makes their margin on the operation 24% not great at current prices. Something to watch, if they continue to trade off operational risk (which very much remains to an extent) for margin.

The other owner in the project gets 33% and the lawyers get 7%. WWI gets the second lowest free cash as a percentage out of all invested parties. Perhaps they should have negotiated the mining contract after the test results for the head grade came out.

Based on the above example the contractors get 0.4g/t and .9g/t in the profit share. Their costs are expected to be 1.2 g/t so does that mean $7.06m in revenues on $6.52m in costs imply a margin of over 50%?



I can accept that they're not in a strong position to negotiate, the company needs to generate revenue and get the project moving. There are however significant risks as well as costs involved with the current deal. The other party is responsibly for the remediation of the site and in preparation for the affordable housing project. Ultimately they'll look at this hole in the ground with the perception of how much money is it making and how much is it going to cost us to fill it in. Also it's unclear if the profit share comes after remediation work has finished and the timing of cash flows.

Cost of mining 130,000 tonnes at 1.2g/t is $6.52mUSD on an expected recovering of 16,700/oz or $390AUSD/oz. Which fits in with the aforementioned $500AUD - $700AuD ASICs mentioned earlier in the thread.

Market cap is $16.4 m based on issued capital of 456,203,370 and share price of $0.036. Based on projected cash flow over the next 12 months and the other risk factors I'd say, in my humble opinion, this stock is pretty much trading at fair value.

Upside will come from progressing the other 5 pits, a smooth ride with the contractors, striking a better deal for mining the remaining 3-4 pits as well as more certainty as to the amount and timing of cash flows.

Positives:
Huge resrouce
Lots of drilling over the last 18 years
Near by infrastructure
Near term cash flow
Good shallow grades

Risks:
Africa (not to be understated)
Many fingers in the pie
Zama Zamas, social unrest
Uncertainty of the timing of cash flows.

What do we think? Have I missed anything, or misquoted anything? Thoughts?