A gold mine is to be established, with capital injection of 180 million dollars now, and 150 million dollars a year later and 100million dollars two years later, whose life is 5 years with a total ore reserves of 7.7million 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. [Using excel]
