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Outcome Visualization Project as of Jan 21, 2022: NuLegacy: Red Hill - 3,300 tpd UG Goldrush Two
Project:Red HillLocation:United StatesStage:2-Target Drilling
Net Interest:98% WIUncapped NSR:3.0%Target Metals:Gold
OV Project ID:1000023OVP Posted:5/22/2020OVP Retired:
Current OV ID:1000066Current OV Confirmed:5/22/2020Visualizer:JK
NuLegacy Gold Corp (NUG-V)
ProfileSearchWeb SiteTreeForumSEDARQuoteIPV
Issued
588,852,453
Price
$0.035
Working Capital
$6,575,968
Key People: Albert J. Matter (CEO), Alexander J. Davidson (Chair), Danny Lee (CFO),
Diluted
822,300,440
Insiders
11.5%
As of
9/30/2021
Visualized Outcome: NuLegacy: Red Hill - 3,300 tpd UG Goldrush Two
NuLegacy spent over $20 million from 2012 onwards trying to find high grade Carlin type zones in addition to the low grade oxide Iceberg zone. In late 2017 NUG brought former Barrick exploration people including Ed Cope, Mark Bradley and Charles Weakly on board in an effort to salvage the play. Their work developed the Rift Anticline hypothesis to the west of all the drilling activity, an area covered by younger basalts which has never been drilled because it was assumed the Lower Plate rocks prospective for Carlin type mineralization. The ex Barrick team which worked on Goldrush relogged all the core to the west and developed a stratigraphic model they were able to map CSAMT geophysical data. A CSAMT survey over the barren rocks to the west developed a structural model very similar in scale and nature to the Goldrush deposit to the northwest that Barrick is developing as an underground mine expected to produce 450,000 oz per year at an AISC of $665 per oz. Barrick completed a PFS for Goldrush but has never disclosed cost details. However, from the technical reports it has filed for the Cortz JV operation which includes UG mining refractory sulphides similar to those that define the Goldrush deposit (25.2 million tonnes of 10.6 g/y gold), which are trucked to the Goldstrike roaster for processing, it is possible to come up with likely costs. This OV imagines a clone of Goldrush One, what it would cost to develop and operate, and what it would be worth at the current gold price.
Visualized Outcome Summary: NuLegacy: Red Hill - 3,300 tpd UG Goldrush Two
Deposit Scenario: 25,200,000 t @ 10.60 g/t Gold
Mining Scenario: Underground 3,300 tpd 20.9 yrs, CapEx $1.0 billion, SustCapEx $300.0 million, OpEx $141.00/t (USD)
LOM Payable: 7.7 million oz gold
Economic Outcome (USD): Revenue Model at OV designated Metal Prices

Annual AverageLife of Mine (LOM)LOM Stats
Recoverable Revenue:$686,435,174$14,361,283,846$570/t ore Recoverable Value:
   Smelter/Transport Costs:($6,864,352)($143,612,838)1.0% of Recoverable Revenue
Gross Payable Revenue:$679,570,823$14,217,671,00899.0% of Recoverable Revenue
   Royalties:($20,387,125)($426,530,130)3.0% of Gross Payable Revenue
Net Payable Revenue:$659,183,698$13,791,140,87896.0% of Recoverable Revenue
   Mining Cost:($104,791,500)($2,192,400,000)57% of OpEx - $87.00/t ore
   Processing Cost:($57,816,000)($1,209,600,000)31% of OpEx - $48.00/t ore
   Other Cost:($7,227,000)($151,200,000)4% of OpEx - $6.00/t ore
   Sustaining Cost:($14,285,714)($300,000,000)8% of OpEx - $11.90/t ore
Total Operating Cost:($184,120,214)($3,853,200,000)28% of Net Payable Revenue - OpEx - $152.90/t ore
Pre-Tax Cash Flow:$475,063,484$9,937,940,87872% of Net Payable Revenue - $394.36/t ore
   Taxes:($106,053,339)($2,230,016,249)22% of Pre-Tax Cash Flow - $88.49/t ore
After-Tax Cash Flow:$369,010,144$7,707,924,62956% of Net Payable Revenue - $305.87/t ore
Note: Concentrate transport costs, smelter treatment costs and retention are subtracted from recoverable revenue to get gross payable revenue to which the uncapped royalty rate for the project is applied. The annual average of LOM sustaining cost is expensed as an annual operating cost. Annual average figures reflect full production years.
Economic Outcome (USD): Royalty Model for 1% NSR at OV designated Metal Prices
Mine Life:21 yearsStartupNPV 5%NPV 10%NPV 15%
Annual Avg NSR:$6,591,837Now$80,313,633$51,764,452$36,159,343
LOM NSR:$137,911,4092028$59,931,270$29,219,684$15,632,682
Economic Outcome - Discount Rate: 10.5% - CAD AT NPV: $2.4 billion - Fair Speculative Value
Gross Rock Value (USD/t):$626Recoverable Rock Value:$570Payable Rock Value:$564
LOM Net Payable Revenue (USD):$13,791,140,878LOM PT Cash Flow (USD):$9,937,940,878LOM AT Cash Flow (USD):$7,707,924,629
USD Pre-Tax NPV:$2,682,218,479Pre-Tax IRR:47.5%Pre-Tax Payback:2.1
USD After-Tax NPV:$1,901,245,774After-Tax IRR:37.5%After-Tax Payback:2.6
CAD Fair Spec Value Low:$23,851,128CAD Fair Spec Value High:$59,627,821CAD Implied Project Value:$29,367,873
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $2.84
Fair Speculative Value Stock Price Range: CAD $0.03 - $0.07
MSV (Market Cycle S Curve): Market Speculative Value represents the typical market pricing pattern of a new discovery as it moves through its exploration-development cycle. The irrational pricing behavior of the yellow channel contrasts with the fair speculative value of the blue channel as defined by the rational speculation model because during the pre-economic study stages there is great uncertainty about how big the discovery will turn out.
Fair Speculative Value Ladder
USD OV NPVCAD OV NPVExch RateDilutedNet Interest
$1,901,245,774$2,385,112,8241.2545822,300,44098.00%
Project StageUncertainty RangeCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Grassroots 0.5% - 1.0% $11,925,564 - $23,851,128 $0.01 - $0.03 $0.03 - $0.07
Target Drilling 1.0% - 2.5% $23,851,128 - $59,627,821 $0.03 - $0.07 $0.07 - $0.14
Discovery Delineation 2.5% - 5.0% $59,627,821 - $119,255,641 $0.07 - $0.14 $0.14 - $2.13
Infill & Metallurgy 5% - 10% $119,255,641 - $238,511,282 $0.14 - $0.28 $1.42 - $2.84
PEA 10% - 25% $238,511,282 - $596,278,206 $0.28 - $0.71 $0.71 - $2.13
Prefeasibility 25% - 50% $596,278,206 - $1,192,556,412 $0.71 - $1.42 $0.71 - $1.42
Permitting & Feasibility 50% - 75% $1,192,556,412 - $1,788,834,618 $1.42 - $2.13 $0.71 - $1.42
Construction 75% - 100% $1,788,834,618 - $2,385,112,824 $2.13 - $2.84 $1.42 - $2.13
Production 100% $2,385,112,824 $2.84 $2.84 - $3.55
Market Speculative Value Stock Price Range: CAD $0.07 - $0.14
Warning: while the market spec value (S-Curve) and fair spec value channels presented in project value terms track the evolving expected ultimate outcome value, when presented in stock price terms the expected stock prices are subject to dilution through future equity financings or project interest farmouts.
Alternative Metal Price Scenarios

Metal 1Metal 2Metal 3Metal 4

Gold


Spot:$1,838 /oz


OV Assigned:$1,838 /oz


Pessimistic:$1,300 /oz


Optimistic:$2,300 /oz


Fantasy:$3,000 /oz


Note: for Metal 1 pessimistic, optimistic and fantasy price scenarios, OV assigned prices are used for Metals 2-4
Economic Outcomes with Alternative Metal Price Scenarios

USD PT NPVUSD PT IRRUSD AT NPVUSD AT IRRAT Payback yrs
Spot:$2,682,218,47947.5%$1,901,245,77437.5%2.6
OV Assigned:$2,682,218,47947.5%$1,901,245,77437.5%2.6
Pessimistic:$1,225,977,45228.1%$808,336,88322.6%4.3
Optimistic:$3,934,759,12464.1%$2,841,277,52850.1%2.0
Fantasy:$5,830,906,29589.2%$4,264,335,98069.0%1.4
Fair Speculative Value for Alternative Metal Price Scenarios
Stage: Target Drilling - 1.0% - 2.5%

CAD AT NPVCAD Target PriceCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Spot:$2,385,112,824$2.84$23,851,128 - $59,627,821$0.03 - $0.07$0.07 - $0.14
OV Assigned:$2,385,112,824$2.84$23,851,128 - $59,627,821$0.03 - $0.07$0.07 - $0.14
Pessimistic:$1,014,058,620$1.21$10,140,586 - $25,351,466$0.01 - $0.03$0.03 - $0.06
Optimistic:$3,564,382,659$4.25$35,643,827 - $89,109,566$0.04 - $0.11$0.11 - $0.21
Fantasy:$5,349,609,487$6.38$53,496,095 - $133,740,237$0.06 - $0.16$0.16 - $0.32
View Detailed Visualized Outcome (KRO Members Only)
Disclaimer: A visualized outcome is one of many possible outcomes for an exploration project as it moves through the 9 stages of the exploration-development cycle from grassroots to a producing mine with failure as an outcome at any point along the way. The range of possible outcomes for the physical nature of a deposit shrinks after delivery of an initial 43-101 resource estimate. While the nature of the deposit constrains the range of mining scenarios, the cost assumptions will vary as the project moves through the feasibility demonstration stages of the cycle, which affects the economic value of the final outcome. This economic value will also vary according to the prices of the metals targeted for extraction which may change during the years it takes for a project to become a mine. An outcome visualization is thus a compilation of best guess assumptions for the key variables that drive the discounted cash flow model, the basis for assigning an economic value to a mine. An OV is not intended as a prediction, but rather as a framework that allows the incorporation of new information generated by the exploration-development cycle for the project into a valuation model on an ongoing, dynamic basis.
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