The proposed price of the mine is reasonable. The verifiable reserves of ore are estimated at 12 tons.The research shows that you can easily produce at least one ton from this mine per year. The capital expenditure needed to get production started would be about US $30 million, with US $15 million outlay immediately after the deal was closed, and another US $15 million a year after. The working capital investment was estimated to be an additional $2.5 million a year starting in 2017. Besides capital costs,there were also gold-mining expenses including employee-related costs, internal and external gold transportation costs, blasting, drilling, and other mining-related costs. Additionally, there were expenses related waste disposal. The finance manager estimated that operating expenses would total US $25 per kg, and would increase at a rate of 5% per year.

Here is all the information I have:

The finance manager figured he could get the bank to finance $12 million of the capital cost with a 10- year term loan at 14% annual interest rate, completely drawn down in 2017. The other $18 million plus $2.5 million working capital investment would come from cash in hand and equity injection from the parent firm. To estimate the cost of equity, also called the required rate of return for the owners, the finance manager believed the best way was to use the Capital Asset Pricing Model (CAPM). CAPM stipulates that the required rate of return for the equity holders for this investment varies in direct proportion with the systematic risk called beta (B).

The beta for gold mining companies was estimated to be 1.4, and the equity risk premium for projects in Canada was 8.8%. The most recent government benchmark interest rate was 7.5%. The Canadian stock market performance, the gold price and the Canadian inflation rates, and benchmark interest rates are shown in Exhibits 1, 2, 3, and 5 respectively. The finance manager also prepared the cash flow forecasts for this investment based on the prevailing Canada corporate tax rate of 25%, shown in Exhibit 7.

To determine if the investment would create value for the firm, the finance manager needed to first estimate the weighted cost of capital (WACC) for this investment. WACC is calculated by weighting cost of debt and cost of equity, with the proportion of capital in debt (D/(D+E)) and the proportion of capital in equity (E/(D+E)), respectively.

Please help me calculate the WACC. thank you!

Forecasted Gold Prices and Volumes Gold Price (thousand $/kg) Operating Expenses (thousand $/kg) New Mine Production (kg) Projected Revenue and Costs Projected Revenue Royalties (13.5%) Operating Expenses Depreciation (S30m/10 years) Pre-tax Operating Profit Taxes (25%) After-tax Operating Profit Projected Non-Operating Cash Elows Capital Costs Working Capital Investment 2017 2018 2019 2020 2021 2022 50 50 28 32 1,000 1,000 1,000 1,000 45,000 50,000 50,000 50,000 6,075 6,750 6,750 6,750 -27,563 28,941 30,388 31,907 3,000 3,000 3,000 3,000 9,862 8,343 8,363 11,309 2,091 2,827 2,466 2,086 6,257 6,272 8,482 7,397 15,000 -15,000 -2,500 -2,500 -2,500 -2,500 -2,500 Forecasted Gold Prices and Volumes Gold Price (thousand $/kg) Operating Expenses (thousand $/kg) New Mine Production (kg) Projected Revenue and Costs Projected Revenue Royalties (13.5%) Operating Expenses Depreciation (S30m/10 years) Pre-tax Operating Profit Taxes (25%) After-tax Operating Profit Projected Non-Operating Cash Elows Capital Costs Working Capital Investment 2017 2018 2019 2020 2021 2022 50 50 28 32 1,000 1,000 1,000 1,000 45,000 50,000 50,000 50,000 6,075 6,750 6,750 6,750 -27,563 28,941 30,388 31,907 3,000 3,000 3,000 3,000 9,862 8,343 8,363 11,309 2,091 2,827 2,466 2,086 6,257 6,272 8,482 7,397 15,000 -15,000 -2,500 -2,500 -2,500 -2,500 -2,500