Update on Merger with Polymetals - Notice of Meeting

Mt Boppy Case 2
Mt Boppy Project Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
$ $ $ $ $ $
Mining - - 14,918,399 7,926,751 3,734,135 -
Administration - - 2,458,618 2,965,120 1,864,712 338,221
Processing - - 2,626,232 9,516,447 7,350,271 -
Total project costs - - 20,003,249 20,408,318 12,949,118 338,221
Source: The Adjusted Mt Boppy Model
Capital Expenditure
The Capital expenditure required in the Adjusted Mt Boppy Model is based on the assumption that PLY is
to make use of reconditioned plant and equipment. Where possible, the management of PLY obtained
quotes for second hand equipment to justify its capital expenditures assumptions. A contingency
allowance of $1 million has been made in the case of second hand equipment not being available.
Mt Boppy Case 1
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Mt Boppy Project Case 1
$ $ $ $
Capital Expenditure - - 14,718,454 - - 700,000
Mt Boppy Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Mt Boppy Project Case 2
$ $ $ $ $ $
Capital Expenditure - - 14,718,454 - - 700,000
The $14.72 million outflow in 2015 predominantly relates to plant and infrastructure costs incurred in
redeveloping the Mt Boppy Project. The $0.70 million capital expenditure in 2018 relates to closure costs
estimated by AMC.
DCF Valuation – sensitivities
The estimated value of the Mt Boppy Project is derived under the DCF approach. Our valuation is most
sensitive to changes in the forecast gold prices and exchange rate. We have therefore included an analysis
to consider the value of the Mt Boppy Project under various pricing scenarios and in applying:
• A change of +/- 5% to commodity prices
• A change of +/- 5% to exchange rate
• A change of +/- 5% to recovery percentage
• A change of +/- 5% to operating expense
• A change of +/- 5% to sustaining capital expenditure
• A real discount rate in the range of 5.0% to 8.0%.
The following tables sets out the valuation outcomes from our DCF analysis.
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