On 6 January, Euromax released the results of its feasibility study on its 100%-owned Ilovica gold-copper porphyry project, conducted by Amec Foster Wheeler, Tetra Tech, DMT, Golder Associates and Schlumberger, amongst others. While reported pre-tax and post-tax NPVs (using a 5% discount rate) are lower than the corresponding figures in 2014’s pre-feasibility study (PFS), at US$513.0m and US$440.1m (vs US$675m and US$558m) respectively, the corresponding internal rates of return are higher, at 19.8% and 17.8% (vs 18.6% and 16.5%). This is as a result of lower initial capex (US$474.3m vs US$501.8m, including contingency) and the more efficient phasing of cash flows. The result is indicative of a more efficient project in capital terms, which is likely to manifest itself in lower future dilution to equity holders, and comes despite the definitive feasibility study using lower long-term metal prices of US$1,220/oz Au and US$2.90/lb Cu (vs US$1,250/oz and US$3.00/lb in the PFS).
