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Outcome Visualization Project as of Oct 22, 2021: Discovery Harbour: Fortuity 89
Project:Fortuity 89Location:United StatesStage:2-Target Drilling
Net Interest:25% TCUncapped NSR:0.0%Target Metals:Gold Silver
OV Project ID:1000032OVP Posted:9/1/2021OVP Retired:
Current OV ID:1000086Current OV Confirmed:9/1/2021Visualizer:JK
Discovery Harbour Resources Corp (DHR-V)
ProfileSearchWeb SiteTreeForumSEDARQuoteIPV
Issued
94,509,294
Price
$0.070
Working Capital
$1,900,638
Key People: Mark Fields (CEO), Rodney Stevens (CFO)
Diluted
164,096,353
Insiders
32.6%
As of
6/30/2021
Visualized Outcome: Discovery Harbour: Fortuity 89 - 1,500 tpd UG Sleeper Clone
The Fortuity 89 project owned by Discovery Harbour and optioned 75% to Newcrest is centered on a silicified outcrop within a gravel covered basin in Nevada's Walker Lane. The outcrop bears alteration evidence for the upper reaches of a low sulphidation epithermal system and has been the focus of shallow drilling in the past that failed to intersect gold mineralization. Although surface sampling yields gold values less than 50 ppb, the speculative question is whether or not this LSE system was fertile with gold. Geophysics has identified a N-S oriented structural zone with a strike of 1.6 km for which Newcrest has proposed a 7 hole RC drill program to test at depths of 300-500 m. The analogue target is the Sleeper deposit whose high grade set of veins was mined in 1986-1996 by Amax by open pit and milled with 90%-95% recovery to produce 1,219,880 oz gold. About 45 million t of lower grade stockwork ore averaging 0.7 g/t gold was heap leached with a 49% recovery to produce 438,609 oz gold. Total throughput for a mill with initial 500 tpd capacity is not available but head grade seems to have ranged 10-15 g/t annually. The lower grade material averaging 0.4 g/t still in place has been the subject of modern economic studies. Because gold at Fortuity89 is not likely to be present close enough to be open-pit mineable, only the high grade structurally controlled aspect of the Sleeper system is considered as an underground mineable target.
Visualized Outcome Summary: Discovery Harbour: Fortuity 89 - 1,500 tpd UG Sleeper Clone
Deposit Scenario: 4,000,000 t @ 13.00 g/t Gold
Mining Scenario: Underground 1,500 tpd 7.3 yrs, CapEx $200.0 million, SustCapEx $40.0 million, OpEx $123.00/t (USD)
LOM Payable: 1.5 million oz gold
Economic Outcome (USD): Revenue Model at OV designated Metal Prices

Annual AverageLife of Mine (LOM)LOM Stats
Recoverable Revenue:$381,430,673$2,786,708,116$697/t ore Recoverable Value:
   Smelter/Transport Costs:($3,814,307)($27,867,081)1.0% of Recoverable Revenue
Gross Payable Revenue:$377,616,367$2,758,841,03599.0% of Recoverable Revenue
   Royalties:$0$00.0% of Gross Payable Revenue
Net Payable Revenue:$377,616,367$2,758,841,03599.0% of Recoverable Revenue
   Mining Cost:($54,750,000)($400,000,000)75% of OpEx - $100.00/t ore
   Processing Cost:($10,950,000)($80,000,000)15% of OpEx - $20.00/t ore
   Other Cost:($1,642,500)($12,000,000)2% of OpEx - $3.00/t ore
   Sustaining Cost:($5,000,000)($40,000,000)8% of OpEx - $10.00/t ore
Total Operating Cost:($72,342,500)($532,000,000)19% of Net Payable Revenue - OpEx - $133.00/t ore
Pre-Tax Cash Flow:$305,273,867$2,226,841,03581% of Net Payable Revenue - $556.71/t ore
   Taxes:($69,175,610)($506,710,259)23% of Pre-Tax Cash Flow - $126.68/t ore
After-Tax Cash Flow:$236,098,257$1,720,130,77662% of Net Payable Revenue - $430.03/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:8 yearsStartupNPV 5%NPV 10%NPV 15%
Annual Avg NSR:$3,776,164Now$21,554,497$17,202,623$13,989,638
LOM NSR:$27,588,4102025$17,732,938$11,749,623$7,998,621
Economic Outcome - Discount Rate: 8.0% - CAD AT NPV: $1.2 billion - Poor Speculative Value
Gross Rock Value (USD/t):$749Recoverable Rock Value:$697Payable Rock Value:$690
LOM Net Payable Revenue (USD):$2,758,841,035LOM PT Cash Flow (USD):$2,226,841,035LOM AT Cash Flow (USD):$1,720,130,776
USD Pre-Tax NPV:$1,331,436,890Pre-Tax IRR:152.4%Pre-Tax Payback:0.7
USD After-Tax NPV:$989,373,056After-Tax IRR:119.7%After-Tax Payback:0.8
CAD Fair Spec Value Low:$12,225,683CAD Fair Spec Value High:$30,564,207CAD Implied Project Value:$45,946,979
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $1.86
Fair Speculative Value Stock Price Range: CAD $0.02 - $0.05
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
$989,373,056$1,222,568,2861.2357164,096,35325.00%
Project StageUncertainty RangeCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Grassroots 0.5% - 1.0% $6,112,841 - $12,225,683 $0.01 - $0.02 $0.02 - $0.05
Target Drilling 1.0% - 2.5% $12,225,683 - $30,564,207 $0.02 - $0.05 $0.05 - $0.09
Discovery Delineation 2.5% - 5.0% $30,564,207 - $61,128,414 $0.05 - $0.09 $0.09 - $1.40
Infill & Metallurgy 5% - 10% $61,128,414 - $122,256,829 $0.09 - $0.19 $0.93 - $1.86
PEA 10% - 25% $122,256,829 - $305,642,071 $0.19 - $0.47 $0.47 - $1.40
Prefeasibility 25% - 50% $305,642,071 - $611,284,143 $0.47 - $0.93 $0.47 - $0.93
Permitting & Feasibility 50% - 75% $611,284,143 - $916,926,214 $0.93 - $1.40 $0.47 - $0.93
Construction 75% - 100% $916,926,214 - $1,222,568,286 $1.40 - $1.86 $0.93 - $1.40
Production 100% $1,222,568,286 $1.86 $1.86 - $2.33
Market Speculative Value Stock Price Range: CAD $0.05 - $0.09
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:$1,792 /oz


OV Assigned:$1,792 /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:$1,331,436,890152.4%$989,373,056119.7%0.8
OV Assigned:$1,331,436,890152.4%$989,373,056119.7%0.8
Pessimistic:$815,549,963100.1%$602,457,86179.7%1.2
Optimistic:$1,863,461,657206.1%$1,388,391,632160.3%0.6
Fantasy:$2,596,999,844279.8%$1,938,545,272215.9%0.5
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:$1,222,568,286$1.86$12,225,683 - $30,564,207$0.02 - $0.05$0.05 - $0.09
OV Assigned:$1,222,568,286$1.86$12,225,683 - $30,564,207$0.02 - $0.05$0.05 - $0.09
Pessimistic:$744,457,178$1.13$7,444,572 - $18,611,429$0.01 - $0.03$0.03 - $0.06
Optimistic:$1,715,635,539$2.61$17,156,355 - $42,890,888$0.03 - $0.07$0.07 - $0.13
Fantasy:$2,395,460,392$3.65$23,954,604 - $59,886,510$0.04 - $0.09$0.09 - $0.18
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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