Member Info for V1d-

Hi - I agree with what you say - this is how they have introduced the 95% recovery. The additional costs of processing which I referred to are automatically taken into account by processing the full volume, which is now only 95% productive ore, 5% being dead rock.

I agree with you that the way it is presented is a bit odd. The cash cost per ounce of $702 from the table is the one which will catch the eye of the reader, whereas the likely figure is going to be significantly lower.

Now I know why I felt so knackered this morning! I hadn't noticed the local time, as I have left my computer clock on UK time. I had a new battery with a lifetime guarantee put into my watch before I came here. It stopped last week after less than 6 months. Is someone trying to tell me something? Better update my Will when I get back to the UK!

Norville - I am keeping my calculations down to a LOMP grand total basis. The detailed year by year numbers depend so much on work which is being done for the PFS/BFS that I have the lazy man's built in excuse to keep it simple!

I agree the G&A at $10/oz processed for all ounces.

The dilution factor should affect only the costs per ounce, not the LOMP ounces recovered. The PEA uses contained metal at 1,573k oz, recovery 93% = 1,463k oz.. Using our 50 deg pit wall example, the mined ore is 10.7Mt, and costs should be calculated on the estimated 10.7Mt x 100/95 = 11.263Mt which will have to be processed because some of the dead rock was accidentally mixed in with it. However, the PEA didn't do this, but just worked off the mined ore unadjusted. The recovered gold should still be 1.23M oz x 93% = 1.1439M oz.

Whichever way, we are in the right area in that the costs per ounce should be well below $702/oz, unless, of course, the pre-strip should be written off pro-rata as the initial stockpile is used. It also assumes that the infill drilling does give us as much as 1.23m oz within a 50 deg open pit at India/California. MC's estimate is 1M oz to 1.2M oz. We will also need those ounces at Indicated for the PFS/BFS.

The SP is still a pain, though. CNR is still holding position with its peers, so the SP decline is market band sentiment based, not Condor specific. Not that this really makes any difference - the SP is way too low and knowing why is of scant comfort to us and to MC.

The sums below are all dependent on the results from the present and any future drilling on India/California proving that there is 1.23M oz in the Indicated category accessible by open pit mining methods. If the 1,573k oz from the PEA can be mined as to 1,230k open pit and 343k underground, then the net cash costs per ounce work out at $557.80/oz.

That's always assuming that the costs per tonne for mining, processing and G&A are accurate. With B2Gold's El Limon mine not too far away, they should be reasonably close.

This hurts my head. The numbers in the NPV P&L and cash flow aren't the same as the ones quoted from the $900/oz and $1,200/oz tables for a given number of mined ounces. The tables are, it would appear, part of a sensitivity analysis, to which our specific cash costs per tonne are applied.

However, blundering on........

I have assumed that the the same proportion of overburden is removed for the new, bigger pit as for the original included in the PEA.

We use the 50:50 pit wall figures, at $1,200 PoG, 15.8:1 strip ratio, 167.9Mt waste, 10.7Mt ore, 1,230K oz at 3.6g/t, theoretically $702/oz.

Capitalise the same initial stripping as for the PEA: (98.2-77.0) = 21.2Mt = 21.2%. 21.2% of 167.9Mt = 36.1Mt capitalised, and 167.9 - 36.12 = 131.8Mt written off over LOMP as "waste" (because the pit wall angles are different this assumption is an approximation, but not miles out). Capex will increase by (36.1M -21.2M) x $2.2 = $32.78M.

Costs therefore, using same calculation principles as for the PEA -

Mining - waste = 131.8Mt at $2.2/t = $289.96M

Mining - ore.....= ...10.7Mt at $2.2/t = $23.54M

Processing ore = 10.7Mt at $20/t = $214.0M

G&A....................= 10.7Mt at $5/t = $53.5M

Total...................................................$581.00M

Gold contained - 1,230K oz

Recovery at 93% = 1.143.9k oz.

Total costs, $581.00M divided by total ounces recovered, 1143.9k = $507.91 cash costs per ounce.

There needs to be a 5% "accidental dilution" factor in the costs for processing and G&A, but it's late for me....

Can someone check please!

We're packing up now ready to come back to the UK mid-next week. Not looking forward to leaving our grandchildren, nor the long trek back just to freeze! 20 deg is NOT warm!

The RNS seems wholly positive to me.

If the OP walls are made steeper and the pit can go deeper, replacing UG recovery, then more gold is recovered from the existing resource:-

- the cut-off improves from 2.3g/t to 1g/t and

- the 15% loss of high grade gold in the sills and pillars is avoided.

It is also easier to mine via an open pit, and the mid to large miners do not generally want to put high cost narrow vein mining know-how and management into a project.

I need to do a few sums on the costs per ounce. SRK settled on a pit size which optimised costs per ounce rather than gold recovered. The came up with 40/42 deg pit walls to recover 800k oz, strip ratio 13.4:1, shifting 98.1MT of waste for a total cash cost per ounce of $682. However, in the NPV calculations, they capitalised (at least) the first 2 years' strip while the mine and mill were being built, thus improving the disclosed cash cost/oz.

The new cash costs are said to be $702/oz, but I reckon they are less if treated in the same way as for the original PEA. I will check it out from the 281 page PEA and post later.