Al Hariqah Property
Executive Summary
2014-03-11 — Latest reported drilling results date. This analysis synthesizes 1,000 Monte Carlo outcomes for the Al Hariqah Property and benchmarks the results against a large global dataset of drill-stage projects.
The results indicate a 53% probability of advancing to a formal resource (high). If a resource is defined, typical outcomes center on low grade and moderate tonnage. Mining methods trend toward majority open pit, with a long mine life in the simulated scenarios.
Cost structure assumptions are varied across simulations to reflect uncertainty at the drill stage: initial capital requirements are moderate, with operating costs low (mining) and low (processing).
Expected NPV: $100M, which is high versus drill-stage peers. Emphasis should be on the distribution of outcomes rather than the single-point mean.
Regional Gold Potential
Al Hariqah is located in Yemen, Asia. The surrounding region has historically demonstrated a high potential for gold endowment and is distal to other gold properties. Physical setting (very high elevation, very high relief, dry climate) shapes access, seasonality, and operating costs. Geologically, the area is dominated by Carbonate sedimentary rocks, under very thin lithosphere with moderately thick sedimentary cover in a Meso- and Cenozoic Basin tectonic province—factors that inform both deposit style and development complexity.
Drill Intercepts
Reported results (Gold) average high grade, long, and very deep. The most recent intercepts are benchmarked against a global gold database.
| Date | Intercept (Gold) | Grade | Length | Depth |
|---|---|---|---|---|
| 2014-03-11 | 1.04 g/t Gold over 8.0 m from 122.6 m | Moderate Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 1.21 g/t Gold over 5.0 m from 153.8 m | High Grade | Thick | Moderate Depth |
| 2014-03-11 | 1.19 g/t Gold over 23.0 m from 95.0 m | Moderate Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 7.38 g/t Gold over 6.0 m from 134.0 m | Very High Grade | Thick | Moderate Depth |
| 2014-03-11 | 1.20 g/t Gold over 5.0 m from 135.0 m | Moderate Grade | Thick | Moderate Depth |
| 2014-03-11 | 1.46 g/t Gold over 8.0 m from 52.2 m | High Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 1.88 g/t Gold over 5.0 m from 67.2 m | High Grade | Thick | Moderate Depth |
| 2014-03-11 | 0.65 g/t Gold over 15.0 m from 101.8 m | Moderate Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 58.30 g/t Gold over 1.0 m from 136.8 m | Very High Grade | Thin | Moderate Depth |
| 2014-03-11 | 3.15 g/t Gold over 14.0 m from 53.0 m | High Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 1.62 g/t Gold over 16.0 m from 54.0 m | High Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 0.92 g/t Gold over 6.0 m from 50.9 m | Moderate Grade | Thick | Moderate Depth |
| 2014-03-11 | 1.32 g/t Gold over 5.0 m from 70.9 m | High Grade | Thick | Moderate Depth |
| 2014-03-11 | 1.70 g/t Gold over 8.0 m from 59.0 m | High Grade | Very Thick | Moderate Depth |
| 2014-03-11 | 0.86 g/t Gold over 4.0 m from 110.0 m | Moderate Grade | Thick | Moderate Depth |
Resource Potential
Benchmarking the drilling intercept data against similar projects suggests Al Hariqah has a high probability of yielding a resource. In quantitative terms: a 53% likelihood of advancing to the resource stage; a 50% probability of exceeding 30M tonnes; and a 50% probability of exceeding a grade of 1.28 g/t Gold. Uncertainty remains large at this stage.
Economic Potential
We evaluate economic potential by running 1,000 discounted cash-flow simulations at a 8% discount rate and a commodity price of $3,338 per troy ounce gold. The expected NPV is $100M, which is high relative to drill-stage peers. However, the distribution of outcomes matters more than the mean: the width of the histogram conveys uncertainty; the tail behavior reflects scenario risk (e.g., capital overruns or lower recoveries); and skew indicates asymmetry in upside versus downside.
Reading the NPV histogram
The tallest portion shows the most likely range. A long right tail suggests meaningful upside under favorable combinations of grade, tonnage, recovery, and capex/opex; a heavy left tail highlights areas where tighter technical constraints (metallurgy, geotechnical, permitting) could materially de-risk outcomes.
- Focus on spread: the interquartile range (IQR) captures the central scenarios.
- Check skew: median vs. mean indicates asymmetry in upside/downside.
- Watch for modes: multiple humps can imply distinct scenario clusters (e.g., OP vs. UG).
- Context: results reflect 1,000 DCFs at 8% DR and $3,338 per troy ounce gold.
Typical simulated scenarios feature a long mine life using methods that are majority open pit, with moderate capital, low mining costs, and low processing costs.
The histograms below summarize the simulated inputs that drive the cash-flow model. They are not firm estimates; they are probability distributions used to test a range of plausible outcomes. Key drivers include:
- Reserve conversion: fraction of in-situ material that becomes economically mineable; higher values typically require stronger continuity, favorable geometry, and supportive geotechnical/metallurgical results.
- Mine life & method mix: shapes sustaining capital and operating costs; underground-heavy scenarios often trade higher unit costs for lower strip and smaller footprints.
- Recovery & processing costs: metallurgy (oxidation state, deleterious elements) can swing these materially.
- Waste:ore ratio (strip/waste): major lever on mining opex and equipment requirements.
- Capex & offsite opex: influenced by infrastructure access, logistics, and regional input costs.
- Average production rate: interacts with recoveries and mine life to shape cash-flow timing and peak funding.