CONGA PROJECT - STAGE 3

Reconciliation Summary Cost Estimate May 2007 - October 2008

All Project Scope - Initial & Sustaining Capital Cost Estimate

Project N A3CO

Cost Analysis (US$)

Cost Estimate Review 2008: Rev. C / Cost Estimate Baseline 2007: Newmont Revision

May 2007 CAPEX

(Newmont Rev)

2008 CAPEX - Stage 3

(Fluor Rev. C)

2008 - 2007

Total Cost - Stage 2

Total Cost - Stage 3

Variance

Last change: 18-Oct-2008

Observations of Escalation, Scope Changes +/- Estimated

INITIAL CAPITAL COSTS

Direct Cost
Mining

Mining Equipment

85,172,700

271,887,297

Pre-Strip Development

15,400,000

53,601,716

Dispatch & Magazine

2,124,424

17,053,003

Mine Inpit Power

Capex Variance Fluor Stage 2
Rev (Feb 2007) - Newmont Stage
2 Rev (May 2007)
Total Mine

1,400,000

1,764,866

11,782,645

115,879,769

344,306,882

2006 Amec Study considered 30 units of mine equipment. The 2008 study consider 78 equipment items.
Revise Mine Plan in 2008
186,714,597 Haul truck unit price increased by US$MM 2.78 to 4.81. market condition and escalation factors.
2008 Capex included spare and tools for mining equipments.
One pit stage 2 versus open two pits simultaneous on stage 3.
2006 Bog Removal was estimated in Golder Scope. Unit prices and quantities increases for pre/stripping and haul
38,201,716
roads.
14,928,579

Steaming & emulsion plant add to 2008 scope.

2007 scope for explosive & nitrate storage was platform only with out buildings. Bigger platforms for Stage 3 design.

364,866 Same scope: mining power and mobile substations.

-11,782,645 Undocumented changes from Feb 2007 to May 2007.

228,427,113

Concentrator Plant & Mine Facilities

1

Civil and Earthworks

34,515,388

56,341,590

In-Plant Roads

17,527,516

26,865,214

Concrete

28,449,729

70,450,160

Structural Steel

18,879,158

42,070,160

Architectural

56,776,228

51,258,761

Mechanical

214,981,899

339,375,031

Piping

40,382,096

50,135,717

Electrical

65,430,102

84,317,308

Instrumentation

13,027,521

20,363,681

2,514,073

9A
Z

Insulation & Painting

Capex Variance Baseline Feb
2007 to Apr 2007
Total Concentrator Plant

Mto Qty: 2007: 5,791,000 m3 / 2008: 4,888,000 m3 (cut and fill).

Unit Price: 2007: 5.96 US$/m3 (3% rock excavation) / 2008: 10.96 US$/m3 (35% rock excavation & 5 Km haul
21,826,202
borrow material area due to revised lay out).
Different location for the Process Plant in Stage 3.
Mto Qty: 2007: 3,580,000 m3 (14 Roads) / 2008: 2,096,000 m3 (22 Roads).
9,337,698 Unit Price: 2007: 4.89 US$/m3 (3.5% rock excavation) / 2008: 11.68 US$/m3 (38% rock excavation & 5 Km haul
borrow material area due to revised lay out).
Mto Qty: 2007: 45,419 m3 / 2008: 95,085 m3.
Obs: 2007 non-process building were estimated by m2. Not concrete quantities for these buildings. Additional scope
42,000,431
due to plant capacity increased from 85,000 to 92,000. Major equipment size increased.
Unit Price: 2007: 626.3 US$/m3 / 2008: 740.9 US$/m3 (rebar and concrete price increase).
Mto Qty: 2007: 4,800 Ton / 2008: 9,036 Ton.
Obs: 2007 non-process building were estimated by m2. Not structural steel quantities for these buildings were
23,191,002 considered. Additional scope due to plant capacity increased from 85,000 to 92,000. Major equipment size
increased.
Unit Price: 2007: 3,933 US$/Ton / 2008: 4,655 US$/Ton (steel price increase).
Mto Qty: 2007: 46,700 m2 / 2008: 47,900 m2.
Obs: 2007 truck shop and other mine facilities were estimated by m2. Concrete and steel prices were included in
-5,517,467 these account for May 2007. Non process building significally increased in Stage 3 (the Stage 2 included truck shop
and mine facilities). A building list reconciliation will be developed .
Unit Price: 2007: 1,215 US$/m2 / 2008: 1,070 US$/m2.
Great increase in equipment prices (quotation). Some prices increased due to equipment specification & capacity
124,393,132
changes. Ref. equipment list reconciliation.
Mto Qty: 2007: 128,700 m / 2008: 85,900 m. Additional water pipe for Flotation circuit. Piping in concentrator area
9,753,621 changed, due to revised lay out.
Unit Price: 2007: 313.7 US$/m / 2008: 583.6 US$/m (increase price of steel)
Mto Qty: 2007: 223,000 m / 2008: 498,000 m (Includes lighting, power & control cable to junction boxes). Verify if
total qty of control cable was included in Stage 2 estimate and separate power & control cables for Stage 3
18,887,206 estimate. Also verify the power increase from 80 MW to 140 MW.
Obs: Variance explanation: US$MM 10 equipment escalation, US$MM 5 additional elec. equipment and US$MM
4 additional quantities of cable.
Mto Qty: 2007: 1,300 ea / 2008: 960 ea (instruments). May 2007 quantities included 242 pull cords, rip switches
and becon and horns.
7,336,160
Obs: mayor equipment increased its quotation. Previous study did not included mine slope detection system and
early storm detection system.
No insulation is included in the scope. Painting is considered in field fabricated tanks, structural steel and piping
-2,514,073
accounts.

-39,830,620

452,653,090

741,177,622

288,524,532

39,830,620 Undocumented changes from Feb 2007 to May 2007.

20,243,205

37,043,522

16,800,317

Mill Sands/Dumps/Port - Consultant

10

Mill Sands Process / Distribution

11

Mill Sands Storage Facility / Stage

1

14

Perol Waste Dump Preparation &

Bog Removal
Mine Unsuitable Material Dump
Perol - Waste Rock Storage
Preparation
Chailhuagon Dump Preparation

15

Surface Water Management

16

Sedimentation Ponds

16D

12
12A
13

80,578,876

100,332,108

20,474,050

58,686,579

512,800

1,675,236

6,659,787

Included (Item 12)

Thickening mechanism, structural and civil price increased due to escalation.

One more thickener was added in stage 3.

Dams Fill Placement (Initial)

Qty: 2007: 3,970,000 m3 / 2008: 4,878,000 m3.
19,753,232 Unit Price: 2006: 11.99 US$/m3 / 2008: 11.86 US$/m3.
Obs: The 2007 study was a conceptual design, in the 2008 study the Earthwork embankment volume increase due
to better geotechnical interpretation, also the unit pricing for the liners was under estimated in May 2007 study.
Dump foundation redesign including membrane liner over karst, contouring to support lining requirements and
complete under drain system.
1,162,436 Scope change occasioned by change in the Bog disposal methodology.

38,212,529

-6,659,787 2008 cost now included in Perol waste dump preparation (see Item 12 and 12A).

2,106,832

3,538,301

17,691,006

33,364,320

894,900

3,806,146

Topsoil Storage

4,911,508

1,431,469 Design criteria change for Chailhuagon Dump resulting in increased quantities in base preparation.
Water management changed from a concept to a design and included additional diversion channels in interim
locations.
Under estimated the size and complexity of the required dams. Chailhuagon sediment control was necessitated by
2,911,246
the addition of Chailhuagon reservoir in the stage 3 study
4,911,508 Stage 2 cost estimate did not include topsoil storage.

16F

Chailhuagon Water Reservoir

1,343,323

1,343,323

17
17A
18

Main Access Road

Anillo Vial
Perol Water Reservoir

16,665,500
0
20,302,881

16,152,967
28,589,233
14,623,353

-512,533 Similar access road for both studies.

28,589,233 Stage 2 did not consider this ring road as part of the study scope.
-5,679,528 Reservoir capacity reduced from 2008 this is now a small dam at reduced cost.

19

Port Marine Structure

20,000,000

43,559,874

23,559,874 The stage 2 study was a conceptual ROM estimate and did not include dredging costs of approx 30.0 million dollars.

Port Facilities - Fluor / Westmar

26,219,440

25,036,124

-1,183,316

Concentrate Transport Trucks

6,669,000

11,389,997

Mine Pit Dewatering - WMC

Sediment Control & Reseeding
Capex Variance Fluor Stage 2
Rev (Feb 2007) - Newmont Stage
2 Rev (May 2007)
Total Infrastructure

2,385,000
0

0
8,050,344

7,419,986

248,823,263

392,102,935

143,279,672

817,356,122

1,477,587,439

660,231,317

19A
22
21
22B
Z

TOTAL DIRECT COST

Fluor Confidential

15,673,314

Stage 2 cost estimate did not include Chailhuagon water reservoir. Addition information gather from the community
after the stage 2 study identified social needs for a reservoir and sediment control structures a Chailhuagon.

The scope of the Port facilities are similar for both studies. The 2008 estimate for shore facilities are likely
understated a trend is being initiated to re evaluate the port facilities scope and estimates.
The truck fleet increased in quantity by 39,under estimated in stage 2, the current fleet has been increased to 71
4,720,997
trucks. In addition the 2008 estimate includes service facilities for drivers.
-2,385,000 No Initial capital cost is reported in this line item. All costs are reported as sustaining capital.
8,050,344 Sediment control & reseeding were not considered on Stage 2.
-7,419,986 Undocumented changes from Feb 2007 to May 2007.

27-10-2008

Page 1

CONGA PROJECT - STAGE 3

Reconciliation Summary Cost Estimate May 2007 - October 2008
All Project Scope - Initial & Sustaining Capital Cost Estimate

Project N A3CO

Cost Analysis (US$)

Cost Estimate Review 2008: Rev. C / Cost Estimate Baseline 2007: Newmont Revision

May 2007 CAPEX

(Newmont Rev)

2008 CAPEX - Stage 3

(Fluor Rev. C)

2008 - 2007

Total Cost - Stage 2

Total Cost - Stage 3

Variance

Last change: 18-Oct-2008

Observations of Escalation, Scope Changes +/- Estimated

Indirect, Owner, Escalation & Contingency Cost

Indirect Cost
27

EP Services

34,527,379

152,411,444

27A

CM Services

79,784,300

92,752,769

27B

CM Gross Up

Original estimate (Stage 2) significantly under stated. Stage 3 estimate includes two bridge periods (4 months
117,884,065 Stage 3/4 and 7 months Stage 4/5). Longer engineering schedule from (15 to 24 months for the Optimized
schedule). May 2007 cost was factored compare to detailed calculation Sept. 2008.
Man-Hours for both studies are similar (1,295,000 aprox) but US$/MH is higher on Stage 3. Original estimate (Stage
12,968,469
2) significantly under stated. May 2007 cost was factored compare to detailed calculation Sept. 2008.
12,996,506 Cost not considered on Stage 2 study. Original estimate (Stage 2) significantly under stated.
Part of Third Party Construction Facilities were moved to this account. Original estimate (Stage 2) significantly
52,285,155
under stated.
Requirement: 2007: 23,600 m2; 3,600 p. cap. / 2008: 40,686 m2; 5,936 p. cap.
28,885,539 Unit Price: 2007: 936 US$/m2 / 2008: 1,270 US$/m2.
Obs: Direct man-hours increased from 10,860,000 to 18,800,000.
27,868,106 Increased direct and indirect total hours.
-6,577,133 Less foreign materials and equipment considered in this study.
Duties in Stage 2 Study were calculated at 12%. Now for Stage 3 study duties are 19% for all CIF imported good
104,945,890
from other country. Original estimate calculation (Stage 2) significantly under stated.

12,996,506

23

Temporary Facilities

25,854,620

78,139,775

23A

Construction Camp

23,137,693

52,023,232

25
26.0

Catering
Freight

35,107,101
60,757,403

62,975,207
54,180,270

26.1

Duties

5,299,117

110,245,007

26A

Third Party Construction Facilities

14,790,504

2,105,756

27A

Capital Spare Parts

11,368,417

35,567,488

0
16,869,591

37,404,993
5,273,656

10,239,579

19,379,020

5,125,872

5,125,872 Stage 2 not considered this cost.

4,000,000

6,855,759

2,855,759 Stage 2 was an allowance. Stage 3 was calculated in detail using staffing plan and ramp up duration was added.

33,274,759
0

33,150,000
6,998,151

-7,603,071

347,407,392

767,584,905

420,177,513

188,032,122

563,463,321

375,431,199

-8,306,016

268,798,970

429,221,465

56,172,713

361,900,000

337,036,278

53,367,444

630,698,970

875,797,900

245,098,930

1,157,832,468

2,206,846,126

1,049,013,658

552,665,033

552,665,033

0
0
0

0
0
-72,000,000

0
0
-72,000,000

-72,000,000

-72,000,000

CAPITALIZED INTEREST & PREPROD.

480,665,033

480,665,033

TOTAL INITIAL CAPITAL

COST

1,975,188,590

4,165,098,598

2,189,910,008

15,649,000

13,199,700

130,469,960

224,070,083

1,500,000
2,000,000

61,500,790
0

Increase in the mine fleet based on the revised mine plan, plus price increases for equipments due to escalation
(2007 to 2008).
60,000,790 Pre Stripping and Haul road Sustaining capital and maintenance costs. Mark Jordan
-2,000,000 Stage 3: no deferred items considered for that inpit power. This is included in item D of initial capital cost.

12,914,288

12,914,288 New pipeline for future tailing displacement (steel and hdpe).

19,979,362

43,005,635

23,026,273 Change is related to the haulage of the drainage blanket. Mark Jordan

4,195,941

8,888,971

159,262,542

132,872,138

0
0
29,475,492
48,361,808

8,094,444
32,793,045
0
55,723,149

4,693,030 Scope change. Mark Jordan

Tailings dam and tailings storage facility increase in capacity added labor and material costs. A
comparison of cost must consider the sum of items 10 and 11 from initial capital with this line item to
-26,390,404 determine the variance over the total life of mine.
Qty: 2007: 9,934,000 m3 / 2008: 3,743,000 m3.
Unit Price: 2007: 13.58 US$/m3 / 2008: 12.45.86 US$/m3.
8,094,444 More topsoil storage this study. Mark Jordan
32,793,045 This item was included in the Mine Equipment initial capital cost. Mark Jordan Double dip to initial Spares
-29,475,492 Cost not considered in stage 3. this may be a double dip.
7,361,341

33,646,000

19,892,390

-13,753,610 Considered light vehicle fleet in Stage 2 study.

-213,687,873

TOTAL SUSTAINING
CAPITAL COST

230,852,232

612,954,633

382,102,401

TOTAL PROJECT COST

2,206,040,822

4,778,053,231

2,572,012,409

27A.1 Spare & Tool - Mine Equipment

27C Initial Fill
27B
27D
26B
27E
34
Z

Vendor Representative
Insurance, Bonds, Permits &
Licenses
Pre-Commissioning,
Commissioning, Ramp Up &
Operation Manual
Consultants Indirect
Training Cost
Capex Variance Fluor Stage 2
Rev (Feb 2007) - Newmont Stage
2 Rev (May 2007)
Total Indirect Cost

Owner Cost
28
Owners Cost
Capex Variance Fluor Stage 2
Z
Rev (Feb 2007) - Newmont Stage
2 Rev (May 2007)

-12,684,748 Most of third party construction facilities were moved to temporary facilities.
Increase in the value of mechanical and electrical equipment. Original estimate calculation (Stage 2) significantly
under stated.
37,404,993 Stage 2: considered in mine equipment cost.
-11,595,935 Liners for Sag mill, Ball mills and Verti Mills transfer to operating cost in Stage 3.
Increase the value of mechanical and electrical equipment. Added Vendor Reps. Cost for wet commissioning, Ramp
9,139,441
up and mine equipment assemblies.
24,199,071

-124,759 Similar total cost.

6,998,151 Cost not considered on Stage 2.
7,603,071 Undocumented changes from Feb 2007 to May 2007.

8,306,016 Undocumented changes from Feb 2007 to May 2007.

Other Indirect Cost

29

Newmont Contingency P50

29

Newmont Schedule P50

30

Escalation

30

EPCM Fee - Fluor

Total Contingency & Esc.
TOTAL INDIRECT, OWNER &
OTHER COSTS

Original estimate calculation (Stage 2) significantly under stated. (Note, Stage 2 Estimate includes 84 millions in
undocumented adjustment between Feb and May 2007.)
Schedule risk analysis identified P50 schedule as having 3 additional month. The cost adjustment reflects 3 month
56,172,713
of additional time based cost.
-24,863,722 Cost change due to other variables than escalation and scope changes.

160,422,495

53,367,444 Stage 2 EPCM cost were factored and included Fee. Addition Fee increased are due to total EPCM cost increased.

Capitalized Interest & Pre-Production Net Income

Capitalized Interest
32
Capitalized Interest
Pre-Production
50
Pre-Production Cost
51
Pre-Production Revenue
52
Pre-Production Net Income
Total Pre-Production

SUSTAINING CAPITAL COSTS

Sustaining Capital Cost
21

Mine Pit Dewatering - WMC

Mining Equipment

B
D

14

Pre-Strip Development
Mine Inpit Power
Mill Sands Process / Distribution Fluor
Perol Waste Rock Storage
Preparation
Chailhuagon Dump Preparation

11

Mill Sands Storage Facility

10
13

16D
27A.1
27E
29
22
Z

Topsoil Storage
Spare & Tool - Mine Equipment
Consultants Indirect
Contingency P50
Light Fleet and Concentrate
Transport Trucks Replacement
Capex Variance Fluor Stage 2
Rev (Feb 2007) - Newmont Stage
2 Rev (May 2007)

Fluor Confidential

-2,449,300 Life of mine for 2007 study was 22 Years an 2008 is 13 years. Shorter mine life implies reduced sustaining costs.
93,600,123

213,687,873 Undocumented changes from Feb 2007 to May 2007.

27-10-2008

Page 2