PRIMARY GOLD LTD 
The cash flow generated from Coolgardie will be used towards the development of the larger Mt Bundy Gold Project in the Northern Territory, that has the potential to be a large scale bulk tonnage operation which is targeting >150,000oz pa production over a minimum 6 year mine life.
The information in this article should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Analyst Comment: This was an opportunistic acquisition for Primary, as it allows the company to enter the ranks of gold production by 2017 and take advantage of the record high Australia gold price. Critically the cash flow generated from Coolgardie (+$40m - TSI estimate) will be used towards the development of Mt Bundy, therefore significantly reducing future dilution. Mt Bundy remains the long term valuation driver for the company as it is one of the few remaining gold development assets in Australia that has the potential to produce more than 150koz pa.
We have estimated that Coolgardie will initially be mined as an open pit operation with production between 45koz - 60koz pa at an AISC of $1,183/oz (TSI estimate). With a low initial capital cost requirement ($7m - TSI estimate) due to historical mine development as well as three toll treatment facilities with 8km of the project, we see this as a relatively low risk opportunity for the company to become a gold producer.
We look forward to drilling commencing at both projects as well as further information regarding timing on the commencement of gold production at Coolgardie in the coming months.
Valuation: This acquisition has resulted in our valuation increasing to $0.42 / share (previous $0.30 / share). The increase was driven by the additional value from Coolgardie, as well reducing future dilution, due to cash flow generated from Coolgardie prior to the development of Mt Bundy.
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This information is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Adam Kiley (AR No. 458224) is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359).
About Primary Gold Ltd:
Primary Gold Limited (ASX:PGO) is a gold-focused company transitioning from explorer to producer at its advanced Mt Bundy Gold Project located in the Northern Territory. Mt Bundy, located 100km east of Darwin, currently hosts a Mineral Resource of over 1.4 million ounces gold at the flagship Toms Gully underground mine and mill (315,000oz), the Rustlers Roost mine (968,000oz, Primary 80%) and the Quest 29 deposit (148,000oz).
Primary Gold's main focus is to return its wholly-owned Toms Gully Mine and processing mill to production.
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Source:
Primary Gold Ltd
The Sophisticated Investor
Contact:
Adam Kiley Director TSI Capital Pty Ltd E: adam.kiley@tsicapital.com.au
