As previously noted, Salazar provided for 2 NPV measures 8% and 12%, the selection of which factor to be applied being dependent on the size of the mine that might result from the exploration

They used the term "tonnes per annum" and set out 2 cases with corresponding discount rates

CUU uses the term tpd,, or tonnes per day

I assume Salazar meant tpd/annum

If that is the case

In Salazar

A 25k tpd/a mine, with a life of 12years required a 12%NPV to be considered a positive BFS

A 50k tpd/a mine, with a life of 15years required a 8%NPV to be considered a positive BFS

the BFS released on Dec 21 sets out the following parameters as being proven M&I

A 130k tpd/a mine, with a life of 21year

Obviously at the time of the Salazar Agreement, a premium was being placed on the desireability of the larger project

The fact that we have defined a project that is substantially larger that contemplated by Salazar, in the desired direction, should warrant the use of a corresponding reduction in NPV for qualification purposes

Just doing the arithmetic, extending the trend set by the data points given provides an equivalent NPV of around 1.5%

This is certainly an oversimplification of what is involved, but it is equally foolish to use measures prescribed for a much smaller project to qualify ours