A gold mining company estimates the initial investment to develop a mine is $$390$mn$.$ It will produce a total output of $1$ million ounces of gold over the next $10$ years $(0\mathrm{.}1$mn each year$).$ The cost of producing is $$1,$zuo per ounce in each of the next $10$ years.

Your friend who is optimistic about gold prices is very sure that prices will rise by $6\mathrm{.}5\%$ per year from its current level of $$1,531$ per ounce. Ignore taxes and working capital effects. Should you take your friend's optimism into account?

What is your best estimate of the NPV of mining gold at a discount rate of $10\%?$