A gold mine is to be established, with a capital injection of 180 million dollars now, and
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A gold mine is to be established, with a capital injection of 180 million dollars now, and 150 million dollars a year later and 100 million dollars two years later, whose life is 5 years with total ore reserves of 7.7 million tonnes. The hurdle rate has been calculated to be 13%. A royalty of 1.25% of the gross sales is to be paid.
Project Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | |
Capital injection | millions | 180 | 150 | 100 | |||||
Tonnes Milled | mil t | 1.3 | 1.5 | 1.8 | 1.8 | 1.3 | |||
Mill Head Grade | g/t | 3.2 | 3.5 | 3.5 | 4.0 | 4.0 | |||
Milling Recovery | % | 75% | 78% | 80% | 85% | 85% | |||
Variable costs | millions | 780 | 975 | 1 260 | 1 359 | 1 059 | |||
Fixed costs | millions | 25 | 27 | 29.20 | 31.50 | 34 | |||
Royalties | % | 1.25 | 1.25 | 1.25 | 1.25 |
Model a deterministic cash-flow for mineral economics.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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