PFS revisited
Posted: Sun Jun 26, 2022 11:07 pm
Taking the 12 October 2021 RNS as a start point it's quite revealing to bring the PFS up to date with the latest economic assumptions.
Just on exchange rate changes alone and leaving everything else unchanged Newcrest's AISC drops from $743 to $687 (exchange rate today0.6943 instead of 0.75). GGP's drops from an already low $643 to $620.
Now if as widely expected the FS factors in ore milled of 3mtpa instead of 2mtpa the life of mine reduces from 9 years to about 6 years (assuming for now that the LOM ore milled stays at 14mt) . Using the same discount factor of 4.5% pa as per PFS the total discount to be applied reduces from 1.486 to 1.3 increasing the NPV by over $200m.
Now if gold and copper prices both increase - well now we're talking. No wonder Sandeep wants earliest possible cash flow.
Just on exchange rate changes alone and leaving everything else unchanged Newcrest's AISC drops from $743 to $687 (exchange rate today0.6943 instead of 0.75). GGP's drops from an already low $643 to $620.
Now if as widely expected the FS factors in ore milled of 3mtpa instead of 2mtpa the life of mine reduces from 9 years to about 6 years (assuming for now that the LOM ore milled stays at 14mt) . Using the same discount factor of 4.5% pa as per PFS the total discount to be applied reduces from 1.486 to 1.3 increasing the NPV by over $200m.
Now if gold and copper prices both increase - well now we're talking. No wonder Sandeep wants earliest possible cash flow.