VALUATION

The Wase Hill valuation is based on a combination of different approaches and a 60:40 split of net profit in favour of the mining partner. This reflects the management view of a high probability that the "Site" will yield an economically viable mineral deposit.

The valuation methodology is a preferred method but can be varied by mutual consent between the Promoters and investors

Our first and most appropriate approach treats Wase Hill as an "exploration property". The value of the property lies in its potential for the existence and discovery of economically viable mineral deposit. The best valuation methodology would ideally be  to use comparable transactions.

HOWEVER THERE IS A DEARTH OF TRANSACTIONS THAT ARE SUFFICIENTLY SIMILAR IN TERMS OF THEIR GEOLOGICAL, GEOGRAPHICAL AND FINANCIAL PROFILES AS TO RENDER SUCH METHODOLOGY INACCESSIBLE

Our second approach is to value the site as a "pre-feasibility development property” is much more apt. This requires using discounted cash flows method which requires the assumption of a high probability that an economically viable deposit exists. This approach is based on and makes the following assumptions:

1.   A discount rate of 15%.

2.   The mineable reserves lend to a workable mining plan, with a production rate

of  300 tons of 50% grade lead ore per day for at least 270 days per annum at normal capacity (2019).

3.   The initial capital cost of operating a surface mine to reach that capacity will be $10m

4.   Our lead price projection is based on 50% of market price as at 10/07/2019.

5.   The profits of the Joint Venture are split 60:40 in favour of the mining partner and

Wase  Hill Ltd.

 

Our discounted cash flow is based on five years of forecasts and a conservative growth

rate of zero thereafter.

The model for Wase Hill Ltd values the company at $59.8m. The model assumes that all taxes, environmental provisions, royalties and mining costs are borne by the joint venture. All exploration costs, management costs and survey costs are borne by Wase Hill.