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Pilot Gold: Halilaga Results Are Good But Very Copper Dependent

Pilot Gold (PLGTF) recently released its revised PEA results on its Halilaga deposit, and while the headline numbers for the deposit were good, they also show how copper-dependent Halilaga truly is. The headline numbers are very good as the project generates strong after-tax IRR of 43.1% and an NPV (7%) of $474 million using a $1200 gold price and a $2.90/lb copper price. In fact, the 43% IRR is tremendous, and shows the potential efficiency of this project - it certainly is economic.

But what investors need to remember here is that the copper price has dropped a good amount and currently is around $2.60/lb.

(click to enlarge)

Source: Pilot Gold

Copper is not $2.25/lb as highlighted above, but if we take the mid-range of the estimates we are probably talking an after-tax IRR around 30% - nothing to sneeze at but a good chunk lower than the headline number.… Read More …