text: 〉〉**gold production**– future gold production 
  was based on the new mine plan; 
  
  〉〉**discount rate**– a pre-tax discount rate of 
  10%; and 
  
  〉〉**operating costs and capital expenditure**
  
  – these costs were based on historic mining 
  costs, new mining contract cost estimates, 
  existing royalty rates with the South 
  Australian Government and the local land 
  owners and management’s best estimates 
  at the time of the impairment testing. 
  
  An impairment is recognised when the carrying 
  amount exceeds the recoverable amount. The 
  recoverable amount for Challenger Gold Mine 
  cash-generating unit has been determined based 
  on its value in use (“VIU”). The impairment test 
  is assessed at the cash-generating unit (“CGU”) 
  level, which is the lowest level for which identifi- 
  able cash inflows are largely independent of the 
  cash flows of other assets. The VIU approach is 
  based on the present value of the future cash 
  flows expected to be derived from the CGU. 
  
  The key assumptions and estimates used in deter- 
  mining the recoverable amount (VIU) are related 
  to gold price, gold production, discount rate, 
  operating costs and capital expenditures. The 
  basis for determination of the impairment was: 
  〉〉**gold price**– future gold price was primarily 
  
  The impact on recoverable amount from varying 
  the above assumptions has been assessed and, 
  given the relatively short period of the expected 
  remaining mine life of the Challenger Gold 
  Project, has been assessed as having an immate- 
  rial impact on the impairment charge. 