Resolute Mining Limited — Capital/Financing Update 2005

Apr 27, 2005

ASX ANNOUNCEMENT

RESOLUTE TO PURSUE DEVELOPMENT OF SYAMA

Resolute Mining announces that it intends to pursue the development of the Syama Gold Project in Mali.

This follows a full review and assessment of the Feasibility Study into the project that was received by the company earlier this month. An executive summary of the Feasibility Study is appended.

Overall the Feasibility Study confirms the ability to recover gold from the Syama ore and shows a positive return project, the key features of which are summarised below.

Throughput	tpa	2,400,000
Ore Grade	g/t	4.0
Recovery	$%$	87.7
Gold Produced	OZS	1,658,000
Operating Cost	US$/oz	291
Capital Expenditure	US$m	82
Net Cash Return	US$m	123
NPV at 8% Discount	US$m	49
IRR (after tax)	%	18.6

The above is based on a gold price of US$425 per ounce and is exclusive of royalty and other payments.

The Feasibility Study is based on just the open pit resource and shows average annual production of approximately 250,000ozs over a six-and-a-half-year life.

The Feasibility Study is really a base case for the project and it identifies numerous areas where the returns from the project can be substantially improved. Two of the most significant are the cost of power and the potential inclusion of the underground resources.

RESOLUTE MINING LIMITED A.C.N. 097 088 689 A.B.N. 39 097 088 689 4th Floor, The BGC Centre, 28 The Esplanade, Petru, USF 000 009 A..4th Floor, Po Box 7232 Cloisters Square, Perth, Western Australia 6850.Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : contact@resolute-It Operating costs are higher than those estimated in the pre-feasibility study. This is due to increases in materials, consumables, labour and energy costs since the prefeasibility was completed and the impact of this has been noticeable particularly on mining and power costs.

The higher capital costs from that of the pre-feasibility results are from an increase in the estimate for plant refurbishment and infrastructure upgrade costs as well as an allowance for funding a longer pre-production period.

The Feasibility Study estimates a project design and construction period of eighteen months. During the next six months the company will continue with many of the low level capital expenditure, critical path activities. A decision to proceed with the full development is subject to the outcome from a number of key project activities that will be advanced during this period. These include:

• 1. Rovalty and fiscal negotiations with the Government of Mali. The project is sensitive to the level of royalty and other taxes.
• 1. Inclusion of Underground Resources. Approximately 1.0 million ounces are contained immediately below the pit. The in wall ramp option for open pit mining is to be further refined to allow its extension for development of the underground resources.
• 1. Power costs. Power costs make up nearly 33% of the ore mining and treatment cost. The Feasibility Study allows for on site generation with diesel fuel imported through Togo. A return to political stability in Cote d'Ivoire would allow fuel to be sourced from that country and a significant reduction to the landed cost of diesel at Syama.
• 1. Progress with the financing package for the project. The company has received numerous indicative offers to finance the project. It intends to advance all the financing options for the project and determine a final financing package.
• 1. Progress with the hedging of the project. The project is sensitive to the gold price and the company intends to examine and put in place ways to reduce the downside risk of the project to the gold price.

The Svama project is based on a substantial ore body. Following the Feasibility Study. a total resource of 6.4 million ounces of gold has been calculated with approximately 4.3 million ounces in measured and indicated category.

Its successful development would see it become a major, long life, producing asset of the company and lift total gold production for the company to over 500,000 ounces per annum.

PETER SULLIVAN Chief Executive Officer

28 April 2005

SYAMA FEASIBILITY STUDY – EXECUTIVE SUMMARY

Index

• Project Background $\bullet$
• Independent Consultants $\bullet$
• Geology and Resources $\bullet$
• Mining and Reserves $\bullet$
• Metallurgy $\bullet$
• Process Design Basis $\bullet$
• Process Description $\bullet$
• Process Control Philosophy $\bullet$
• Plant Lavout
• Electrical ¥
• Infrastructure $\bullet$
• $\bullet$ Environmental
• Community $\bullet$
• Government Relations $\bullet$
• Project Implementation and Staffing $\bullet$
• Capital Cost Estimate $\bullet$
• Operating Cost Estimate $\bullet$
• Project Economics $\bullet$
• Project Risks and Opportunities

Project Background

Resolute Mining Limited appointed Lycopodium Engineering Pty Ltd to assist in the preparation of this Feasibility Study, which investigates the reopening of the Syama Gold Project in Mali, West Africa.

The Syama operation was established by BHP and was owned and operated by BHP and Randgold during the period 1990 to 2001. Both operators were unable to achieve a sustainable operation based on whole of ore roasting and Randgold placed the operation on care and maintenance in 2001. The project was based on open pit mining and an ore treatment route comprising crushing, milling, whole ore roasting and carbon in leach gold recovery.

This Study examines the feasibility of a similar operation in which concentrate roasting replaces the whole of ore roasting. Resolute has concentrated on understanding both geologically and metallurgically the orebody fuel characteristics. This work has been used to develop a flow sheet that will have the flexibility to ensure autothermal operation of the roaster whilst also being able to meet the appropriate sulphur dioxide (SO2) emission quidelines.

Independent Consultants

The conclusions in this report are based on work undertaken internally by Resolute personnel in conjunction with the following list of Independent consultants:

• Sample Preparation Analabs, Morila, Mali, ٠
• Sample Analysis Analabs, Morila & Perth. $\bullet$
• Metallurgical Testwork AMMTEC Limited, Perth, $\bullet$
• Process Plant Options Geoff Motteram (Geomett Ptv Ltd). $\bullet$
• Roasting Testwork AMMTEC under supervision of consultant Ken Kellet.
• Plant Engineering Lycopodium Pty Ltd.
• Power and Electrical Geoff Bailey (BEC Pty Ltd) and John Shackleton (Electrical Consultant),
• Plant Capital Costs & Operating Cost Review Lycopodium Pty Ltd. $\blacksquare$
• Resource Modelling Hellman & Schofield Pty Ltd,
• Geotechnical Chris Orr (George Orr & Associates).
• Pit Design and Mining Schedule James Pearson (Consultant Mining Engineer).
• Mine Scheduling, Equipment and Mining Tender Documentation David Cooper (Mining Resource Solutions Ptv Ltd),
• Review of Underground Options Peter Hepburn-Brown (Resource & Capital Management Pty $\bullet$ Ltd) and Rapallo Ptv Ltd.
• Review of In Wall Ramp and Underground Guy Simpson, Rapallo Pty Ltd $\bullet$
• Environmental Audit and Data Compilation Earth Systems Pty Ltd, Digby Wells & Asssociates,
• Air Pollution Modelling Environ Pty Ltd.
• Weather Station and Data Management Sentinel Pty Ltd,

Geology and Resources

The Syama mining permit straddles a major regional structure (the Syama shear), which can be traced over hundreds of kilometres southwards into Côte d'Ivoire. A number of gold occurrences, including Syama, lie adjacent to this NNE trending structure, which is believed to play an important role in controlling gold mineralisation in the region.

The ore at Syama is located within highly altered (carbonate-silica-pyrite) mafic rocks. The gold mineralisation is very fine grained and often encapsulated in pyrite. The ore is hard, siliceous, abrasive, refractory and in places contains significant quantities of active carbonaceous material.

Diamond and RC drilling of the Syama deposit during 2003 and 2004 has provided material for metallurgical testwork, as well as structural, geotechnical and resource studies. More than 14,600m of RC and diamond drilling were completed in 52 drill holes.

In early 2005 a new resource calculation was completed using Multiple Indicator Kriging. This modelling used historical drilling data as well as data generated from Resolute's 2003 and 2004 drilling campaigns, where the drill hole data could be verified. More than 260 drill holes comprising 44,300m of drilling and 38,900 samples were used in recalculating the resource model.

A total resource of 24.44 million tonnes grading 3.0g/t for 6.43 million ounces has been calculated. The resources are broken down by category in the following Table 1.

Category	BCM	Tonnes	Grade	Ounces
	Um 3		G/t
Measured	2,529,960	6,942,415	3.2	712,596
Indicated	12,552,828	34,449,717	3.2	3,555,383
Inferred	9,358,864	25,187,648	2.6	2,165,743
Total	24,441,652	66,579,779	3.0	6,433,722

Table 1 Syama - MIK Recoverable Resource Estimate at a 1g/t Cut Off

Mining and Reserves

The Feasibility Study is based on mining a single pit to the 95m RL. The current pit base is at 180m RL (230m deep) and the surface is at approximately 410m RL.

The pit will be mined by conventional open pit methods utilising a Mining Contractor.

The pit design (DES21), which contains 13,657,441 tonnes grading 4.0 g/t for 1,777,187 ounces is the design used in this study. The strip ratio is 5.3:1.

Of the total reserve 3,251,366 tonnes at a grade of 4.0 g/t for 414,672 ounces is Proven Ore and 10,406,085 tonnes at 4.0 g/t for 1,362,514 ounces is Probable Ore.

Normally there would be a "financing" requirement to have a greater proportion of reserves classified as Proven. However, there is historical support (grade control drilling and mining reconciliations), which gives confidence that the probable reserves will convert to Proven Reserves with tighter drilling. Access to the pit to complete this drilling from surface is not practical, is expensive and is not considered necessary given the earlier mining history.

As there is a significant prestrip, ore at the required processing rate of 2.4 Mtpa rate is not available in the early period of the Project so is supplemented with medium (0.26Mt at 2.6 g/t) and low-grade sulphide stockpile material (1.93Mt at 1.8 g/t).

It is planned to treat some of the stockpiles of transition (0.24Mt at 2.9 g/t) and oxide (1.68 Mt at 1.2 g/t) material in the preproduction period to obtain an early cash flow from the Project.

To assist orebody fuel contents to the roaster, grade control samples will be routinely assayed for organic carbon, sulphur and gold. Ore will be placed on the ROM pad as a series of fingers and will be blended to ensure suitable fuel content to the circuit.

Ore has been classified into several zones:

• Main Ore Zone contains 69% of the insitu reserve ounces.
• Footwall Ore Zone holds 17% of the insitu reserve ounces.

The remaining ore is located as discrete zones, usually in the hanging wall of the Main Zone. These $\bullet$ account for 14% of the insitu reserve ounces.

Initial ore from the pit is from the northeast portion of the cutback and represents part of the Footwall Ore Zone mineralisation.

The ore and stockpile material is scheduled for processing over a Project life of 6.5 years.

More than 2.4 million ounces of resources occur beneath the Des21 pit. Studies are continuing on how to exploit this mineralisation by underground mining techniques.

Metallurgy

Pre Resolute History

BHP

BHP commenced operations on Syama oxide ores at the rate of 0.75 M tonnes per annum in January 1990, with an expected mine life of 3 to 4 years. The oxide circuit had minimal crushing, single stage SAG milling and standard CIL gold recovery. No major operating problems are recorded and the plant soon expanded to a 1.0 M tonne per annum rate.

Initial testwork on primary sulphide ore treatment for Syama started in 1988 and continued during operations on the oxide ore. Testwork utilising a pyrite float and roast of the pyrite concentrate indicated an appropriate primary ore treatment circuit, averaging 92.6% Au recovery to the pyrite concentrate and 96.3% Au extraction in leaching of the calcines formed in roasting of the concentrate, with overall recovery at 89.2% Au. This approach was recommended for sulphide ore treatment in November 1988 [and is the approach now taken in this Feasibility Study].

Apparently only three composites of sulphide material, biased to the upper portion of the sulphide zone, were used in pilot testwork. These averaged 3.2%S and 0.9% Corganic for a sulphur equivalence (S Equiv.) of 5%.

BHP also completed pilot testwork on whole ore roasting, at coarse and at fine feed sizes, plus roasting of pyrite concentrates. Results indicated that:

• Overall gold extraction into leach was 91.6% for both the whole ore roast and for concentrate roasting.
• Low grade and high reagent consumptions for the whole ore roast Electro Static Precipitator dust meant that such material was uneconomic to leach. Hence whole ore roast practical extraction fell to 89.9% Au.
• The major difference between the process options was in $SO2$ capture where whole ore roasting indicated 65% capture and concentrate roasting in the presence of some carbonates indicated only 21% capture.
• The piloting sample used had S Equiv = 5.0%.

Their studies established an average ball mill Wi of 19.7kWhr/t, a rougher flotation response averaging 93.3% Au recovery with 13.2% weight recovery and CIL gold recovery in leaching of calcines was predicted at 93.0%. [These results are essentially the same as those achieved in the Resolute work].

The BHP studies did not raise concerns about the hard and highly abrasive ore going to a single stage air swept SAG mill, despite pilot plant results that indicated the autogenous Wi to be much higher than the ball mill Wi, that air swept was inefficient and that a critical size build up had occurred in the pilot SAG mill.

Despite the excellent results from concentrate roasting testwork BHP elected to proceed with whole ore roasting due to the need for a scrubber to capture $SO_2$ when concentrate roasting. With whole ore roasting naturally occurring carbonate in the ore enabled sufficient SO2 capture in the roaster to meet the required emission quidelines.

In October 1995, after 12 months operation, BHP identified major problems with the whole ore roast and determined that the design S Equiv of 5% had not been achieved and that during the first 12 months head grades averaged 2.6% S and 0.2% C org, for S Equiv = 3.0%. During that period fuel input to the roaster was running at 17 litres of diesel per tonne of ore (ie 1.4% of feed).

Randgold $\bullet$

In June 1996, Randgold made an assessment of upgrade potential as part of their purchase. They proposed two upgrade stages with the ultimate aim of increasing annual throughput from about 1.6 Mtpa to 3.0 Mtpa, utilising the whole ore roast circuit plus a wet crushing, grinding and float circuit on lower grade ores producing sulphide concentrates to sweeten the roaster feed. This approach was designed to remove build-up from the dry SAG mill for treatment in the float circuit. It was expected that recovery would improve from the 82.5% Au being achieved by BHP to 85.9% and that costs would fall due to elimination of fuel from the roaster.

Randgold purchased the operation and proceeded to construct the expansion as proposed. The resultant plant had numerous operating problems.

Randgold found that they could not operate continuously due to the power plant overloading and reliability problems. Recovery did not improve, as the column float cells could not lift coarse sulphides, with consequent float tails losses and overload of the roaster ESP from the very fine calcines generated. Overload to the ESP caused excessive dust and gold loss.

Despite these problems the circuit did run with minimal fuel addition to the roaster and the operators were confident that it could be made to work. However, with prolonged sub US$300 per oz gold prices and with the necessity for mine cut backs emerging. Randgold determined to shut down the sulphide circuit and revert to treatment of low grade oxide stockpile, before placing the mine on "care and maintenance" in 2001.

Resolute Work

Resolute has carried out extensive metallurgical testing, the results of which demonstrate consistency of response throughout the Main Ore zone and support the choice of a sulphide float – roast – leach flowsheet.

The testwork is based on a series of composites, as well as variability samples, from across the ore body within and below the proposed pit. The design is based on an average feed of 2.5% S and 0.2% Corganic or S Equiv of around $3%$

As the ore is hard (20 Wi), and abrasive the crushing and grinding circuits are to be upgraded.

Excellent flotation recovery of sulphur and gold is achieved at a grind size of P80 of 106 micron.

The overall recovery of gold from the Main Ore zone is anticipated to be 87.8% (discounted 0.5% for losses to dust), comprising:

• Sulphide float 93.4%
• Roast 99.5%.
• $CIL 94.5%$ .

Process Design Basis

A flowsheet based on producing a sulphide flotation concentrate as roaster feed has been adopted for the Study. This approach eliminates the risk of requiring supplementary fuel addition to the roasting operation, which was the primary cause of failure for BHP. A scrubber has been added to ensure compliance with WHO 24-hour ground level air quality quidelines.

Process Description

The design ore treatment rate is 2.4 Mtpa at a mill feed grade of 4.0g/t Au. The key process steps are:

• 3-stage crushing.
• 2-stage milling. $\bullet$
• Sulphide flotation. $\bullet$
• Concentrate roast.
• Calcine quench and filtration to remove magnesium.
• CIL (Carbon in leach) gold recovery.
• Wet gas SO2 gas scrubbing using flotation tailings.
• Standby filtration in the event that concentrates need to be dewatered to ensure autothermal operation.

Process Control Philosophy

The treatment process will employ a mix of conventional operator and computer managed process systems.

Plant Layout

The proposed treatment plant will make maximum use of the existing facilities, which will be refurbished as required. New facilities will include secondary and tertiary crushing, the flotation circuit, a wet gas scrubber and a new water storage facility.

Electrical

Resolute engaged BEC Engineering to review the electrical requirements of the entire Project. The required scope of electrical improvement includes power generation, the treatment plant, mine supply and the accommodation facilities.

Infrastructure

The Project assessment includes provision for:

• Communications.
• Administration facility upgrades.
• Accommodation upgrades.
• Contract power generation.
• Project offices and support facilities.
• Water abstraction from the existing pits and new bore fields.
• A new water storage facility.
• A new laboratory building.
• Treatment plant residue disposal.
• Project security services.

Environmental

The principal process emission will be sulphur dioxide $(SO2)$ gas from the roasting operation. Emission modelling undertaken by Environ indicates that the use of a wet scrubber on the roaster exhaust will mitigate this impact and comply with WHO 24-hour ground level concentration guidelines for SO2 at nearby Forou and Tambelini villages.

A number of environmental issues related to poor historical practices have been identified on site.

It is Resolute's intention to undertake progressive rehabilitation of all disturbed areas once in operation. Baseline studies have been commenced and a new weather station has been installed.

A management plan is to be established to ensure that appropriate environmental procedures and strategies are employed to mitigate any identified risks and ensure compliance with the appropriate regulations.

During redevelopment of the site a new water storage dam is to be constructed downstream of the existing tailings dam. This will have an engineered wall to minimise any leakage. A sump will be constructed down stream of the water dam. Any leakage reporting to the sump will be pumped back to the tailings facility. Investigations into the establishment of a "wetland filter" downstream of the sump are underway.

Community

In response to a study undertaken on behalf of Randgold a SOMISY Mine Community Consultative Committee (SMCCC) was established in February 2001 with representatives of the villages in the area to assist in the retrenchment process when the mine was put on care and maintenance.

Since taking management of the Syama site in May 2004 Resolute has met monthly with the SMCCC and uses it as a mechanism to inform the community, to address community concerns and to discuss and agree projects that are proposed by individuals or organisations to SOMISY for implementation.

The committee has representatives of all communities within 20km of the mine as well as the Mayor of Forou and the Sub-Prefect who is the Government's representative in the area. A representative from the Direction National de Géologie et des Mines (DNGM), which is the delegate of the Minister, usually attends these meetings.

The SMCCC provides a mechanism for directly engaging the decision makers in the communities surrounding the mine and enables the community to take ownership of the projects to which SOMISY agrees to contribute.

Resolute's aim is to establish, in consultation with the community (through the SMCCC), projects that can be sustainable and continue after the mine ceases operation.

Government Relations

Since taking management of the Project, Resolute as Manager of the Joint Venture has established relations with the Ministry, both directly with the Minister of Mines and via the DNGM.

Under the Mining Code the DNGM is the government organisation responsible for the monitoring and administration of exploration and mining activities.

In liaison with the Minister of the Environment, DNGM through the Director of Mines oversees environmental activities and compliance of mining operations.

The Director of Mines acts on behalf of the Ministers of Mines, Environment, Labour / Employment and Health to ensure that the mining activities comply with the various acts and regulations that are in force from time to time.

At the same time Resolute has commenced discussions with the Government via the Minister of Mines on fiscal concessions it is seeking for the Project.

Project Implementation and Staffing

Lycopodium proposes that the treatment plant construction be managed as an EPCM contract.

The design and construction schedule developed by Lycopodium contemplates an eighteen month redevelopment period.

Resolute will manage the reopening of the mine and the refurbishment of the Project administration and accommodation facilities and other infrastructure activities.

As there is a significant prestrip of the pit the Mining contractor will need to mobilise to site and commence operations at least 6 months prior to commissioning of the plant to ensure adequate supplies of ore to the ROM pad. There is a schedule risk with the mining contractor as equipment and tyres have long lead times. The currently favoured contractors have old gear that could be suitable to start the Project.

There will be a need for senior expatriate personnel to be employed one year before processing commences to ensure appropriate Malian and expatriate workers are recruited and the appropriate training and operating policies

are in place. Mining and Administration personnel will be employed first followed closely by process management and plant operations personnel.

Resolute anticipates a SOMISY work force of 32 expatriates and 245 National workers. The Mining, Catering and Laboratory contractors will employ additional expatriates and Nationals on site. It is anticipated that the total national workforce on site will exceed 500. Resolute is committed to training of nationals so that they will ultimately replace expatriates.

At Syama there are fourteen two and three bedroom houses in the village and thirty seven (37) units in the old BHP camp. The camp units vary from single motel type accommodation to small four (4) room units, and provide a total of approximately eighty five (85) beds.

The camp will be refurbished early in the project and will provide accommodation for the expatriate construction work force.

During operations, consideration is being given to having a mix of married and single expatriates and senior Malians accommodated on site. The married personnel will be accommodated in the village whilst the single personnel will be accommodated in the camp. An area adjacent to and to the north of the camp has been set aside for the mining contractor's village.

Junior National staff will be paid a living allowance and will be expected to find their own accommodation in Forou where SOMISY will provide them with potable water and electricity.

Capital Cost Estimate

The estimated capital cost of the Project is US$82.02 million as at Q1, 2005 to an accuracy of ±15% and is summarised by area in Table 2.

Area	MillionsUS$
Site Establishment & Construction Costs	$2.28
Treatment Plant Costs	$40.67
Infrastructure Costs	$7.59
Mine Establishment	$5.22
Management Costs	$2.23
EPCM	$10.37
Owners Costs	$13.66
Grand Total	$82.02

Table 2 Capital Costs by Area

Operating Cost Estimate

The estimated annual operating cost of the Project is US$75.3 million (as at Q4, 2004 to an accuracy of ±15%). This equates to US$31.37/t ore milled or US$291/oz.

A breakdown of operating costs is shown in Table 3.

COST CENTRE		US$/Year	US$/t
Mining, Geology and Environmental Labour-Mining		$1,363,084	$0.57
	Mining Contract	$27,216,000	$11.34
	Other Mining Costs	$1,186,158	$0.49
	Sub Total - Mining	$29,765,242	$12.40
Process Plant	Labour-Processing	$2,736,427	$1.14
	Operating Consumables	$7,114,493	$2.96
	Power-Processing	$23,177,295	$9.66
	Maintenance Consumables	$3,065,032	$1.28
	Other Processing Costs	$147,342	$0.06
	Sub Total - Process	$36,240,589	$15.10
General and Administration	Labour-G&A	$2,262,782	$0.94
	Power-G&A	$1,161,738	$0.48
	Other G&A Costs	$5,865,108	$2.44
	Sub Total - G&A	$9,289,629	$3.87
	TOTAL	$75,295,460	$31.37

Table 3 Operating Costs Based on 2.4Mtpa Throughput (Sulphide Ore)

Project Economics

The Base Case model incorporates the terms of the current Establishment Convention between the Republic of Mali and SOMISY. The main impact of the Convention is to provide relief for certain taxes and duties, to allow import of Capital goods free of duties and provide certain rights in terms of employment, training and employment for expatriates and Malian Nationals.

As a result of large capital expenditures, exploration activities and unprofitable operations since inception, SOMISY has retained tax losses in excess of US$123 million, which can be offset against future profits.

Whilst Resolute is in the process of negotiating new fiscal arrangements with the Government, which it hopes will deliver some additional concessions: the existing Convention is the basis for the Base Case economic analysis.

The following parameters have been used in the Base Case analysis:

• Schedule from pit design Des21 with reserves of 13.657 million tonnes grading 4.0g/t (1,784,940 ounces) $\bullet$ and a stripping ratio of 5.3,

• Milling of 1,712,000 tonnes of stockpiles at an average grade of 1.9q/t Au (for 105,328 ounces), $\bullet$

• Operating costs as per Table 3, $\bullet$

• Average metallurgical recoveries of 87.7%, $\bullet$

• Capital of US$82.02 million, which is summarised in Table 2, $\bullet$

• Insurance premiums to cover Political Risk.

• Provision for Mine Closure of US$5million.

• Sustaining Capital at US$6million. This allows for annual lifts on the revised tails design, of around $\bullet$ US$250,000 pa, for the life of the Project as well as US$4.5 million for other capital works.

• A residual value for the plant of US$2 million.

At US$425 per ounce the Base Case Project economics, exclusive of any royalties is as follows:

• US$49.0 million NPVa% $\bullet$
• IRR $\bullet$
• Net Cash US$123.5 million $\bullet$
• Mali Royaltyo%
• Recovered ozs 1.658 million ozs $\bullet$
• Gold Production 250,000ozs average per annum (recovered) $\bullet$

18.6%

US$0

• Cash Costs US$/oz US$291/oz
• US$82.02 million Capital Cost $\bullet$
• Op Cost /t milled US$31.37 $\bullet$
• Annual throughput 2.4Mtpa @ 90% availability $\bullet$
• Average Grade 4.0/t Au $\bullet$
• Project Life 6.5 years $\bullet$

With the inclusion of a 6% Mali Government royalty the Project has the following economic parameters:

• NPVa% US$20.3 million $\bullet$
• IRR 12.6% $\bullet$
• Net Cash US$81.2 million ٠
• Mali Rovaltyes US$42.3 million
• Recovered ozs 1.658 million ozs ٠
• Gold Production 250,000ozs average per annum (recovered) ٠
• Cash Costs US$/oz US$291/oz
• Capital Cost US$82.02 million $\bullet$
• Op Cost /t milled US$31.37 $\bullet$
• Annual throughput 2.4Mtpa @ 90% availability $\bullet$
• Average Grade 4.0/t Au $\bullet$
• Project Life 6.5 years $\blacksquare$

In both cases the project is most sensitive to variations in gold price and less so to variations in operating costs. It is relatively insensitive to changes in capital costs.

Project Risks and Opportunities

The principal risk facing the project is the uncertainty in fuel pricing. Power generating costs amount to more than US$24M per annum or US$10.14/t milled.

The key opportunities for the Project include:

• Establishment of grid power supply from Côte d'Ivoire.

• Sourcing of fuel from Abidian, Côte d'Ivoire rather than Lomé, Togo or Cotonou, Benin.

• The early processing of remnant oxide and transition ore using the refurbished milling and CIL facilities.

• The reduction in waste mining in the pit by developing an In Wall Ramp (IWR) from the 280mRL. The cost of the ramp is paid for from the savings in waste stripping and provides a platform from which to prove up and subsequently mine the underground resources.

• The definition of further mining reserves beneath the pit where more than 2.4 million ounces of measured resources occur beneath (see Table 4). Within the 3 g/t envelope there are approximately 1 million ounces at a grade of 4.7g/t. Studies are continuing on how to exploit this mineralisation by underground mining techniques, and

  • Further discoveries from satellite deposits in the Syama or Finkolo permits.

Category	Tonnes	Grade	Ounces
Measured	2,483,128	3.0	241,584
Indicated	21,419,932	3.1	2,171,918
Inferred	22,603,595	2.6	1,898,919
TOTAL	46,506,655	29	4,312,422

Table 4 - Total Resources Beneath the Proposed Pit Des 21 at a 1.0 g/t Au Cut Off