AISC for EGA will likely be below AUD $1000.
So what do we have based on today's indicated and inferred resource (a high % of the resourcethe is now indicated).
If we assume a conservative $700 margin/Oz.
And also assume no further discovery - a 400000 ounce resource (although this is likely to increase).
Current mcap is $37.5m at 29c per share.
Assuming a CAPEX of 40m and 100% financing ($30m) for a 5 year mine life, that would bring the post-tax NPV to $118m including royalties and an 8% discount rate. Note the IRR would be greater than 1 (based on these assumptions), so financing should be an attractive option for a lender.
There is not much dilution in EGA with only 11.7m unlisted options and only 3.3m performance shares on top of the current 129.2m listed shares.
So a post-tax NPV would translate to a share price of $0.82. Let's throw in 10% risk - So we are looking at a risked share price of 0.74c.
That's using a conservative gold price and a pretty solid 8% discount rate and further 10% risk.
This is a rough calculation, but it discounts further (likely) resource upgrades, and is conservative on margins based on today's prices and factors in a pretty solid risk for an Australian gold mine at this level development.
Hmm.....
EGA Price at posting:
29.0¢ Sentiment: Buy Disclosure: Held
