Calculate the npv to nearest dollar-australia mining company

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An Australia mining company, QMC is thinking about opening a new gold mine in South Africa. The mine is expected to produce 100,000 ounces of gold per year for 5 years. The current price of gold is US$1700 per ounce and the company will hedge its sales at this price for the 5-year period. The mine is expected to cost A$ 100,000,000 to set up and extraction costs are expected to be US$1350 per ounce for the life of the mine. The appropriate discount rate is 0.19. The current exchange rate is US$ 0.61 /A$. Profits are taxed at 30%. In order to decide the viability of this project, QMC needs to know the NPV. Calculate the NPV to the nearest dollar.

Reference no: EM132689009

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