Mike Harrison, Vice President, Corporate Development
We have been saying for awhile that if we can add some immediate pre-cash from a quality asset that is a priority for us and if we had a choice, we probably would have picked a different time, just coming off what else we’ve been doing here. But I think now, from a bandwidth perspective, and just from a balance sheet management perspective, it is important that we execute on the moving parts here, I think we’ve demonstrated in 2014 an ability to manage our existing assets much better than historically and now we need to bring that same kind of discipline, same kind of execution to these new opportunities so that our stockholders can really see the pay-off in terms of rising free cash flow. And we always need to be looking at ways we can improve the portfolio assets that we have. I think we’ve done a really good job of doing just that recently but we do need to digest a little bit here and really focus on what we have and these new pieces and making sure that we work the way we think they should and will.
Michael Dudas
Your answers are appreciated Mitch. Thanks a lot.
Mitchell J. Krebs
Thanks Mike.
Operator
Your next question comes from the line of Graeme Jennings from Conmark Securities. Your line is open.
Graeme Jennings, Conmark Securities
Congratulations!
Mitchell J. Krebs
Thanks man!
Graeme Jennings
When you’re acquiring a mature asset like this but your reclamation liabilities I noticed there are certainly a strong social issues operating there.
Mitchell J. Krebs
Yeah, I think the ARO estimate is at $37 million which is what we factored into our evaluation of the opportunity. So, whether there are ways to optimize that,. that remains to be seen but that’s the estimate and how we factored it into the maps.
Graeme Jennings
Right. I noticed a large capital supply against plug-ins and projects. I was just wondering what is the tax rate there on the work plan?
Mike Harrison
I think the it will be 28% or 30% corporate rate plus state rate. I worked that up…
Graeme Jennings
Is there a levy on the NOLs?
Mike Harrison
Yeah, there is a state levy on the NOLs as well.
Mitchell J. Krebs
And then there are two existing royalties, one the Royal Gold and then another to a private party. The Royal Gold NSR is 2% and the other party is 3%.
Graeme Jennings
Alright thanks. And how is the skiing now on the hill?
Mitchell J. Krebs
Great. I understand there is a lot — no shortage of snow.
Graeme Jennings
Oh yeah that’s what I heard last year. Right, thanks Mitch.
Mitchell J. Krebs
Thanks Graeme. See you.
Operator
Your next question come from the line of Jorge Beristain from Deutsche Bank. Your line is open.
Jorge Beristain, Deutsche Bank
Hi good morning Mitch and everybody.
Mitchell J. Krebs
Hi Jorge.
Jorge Beristain
Hi. My question is a little bit on the guidance that you are saying for the 7-year mine life. That would assume 100% recovery and I just wanted to understand if we should not be more conservative modeling 80% to 90% which would imply a shorter mine life, or why should we not think about being more conservative on that? You’ve mentioned softer ore or higher grade, just wanted to understand, are you running a 100% recovery scenario?
Mitchell J. Krebs
Joe?
Joe Philips
Hi Jorge, this is Joe Philips. Our projections for the life of the mine pretty well parallel Goldcorps long-term mine plan which has shown historically a significant positive reconciliation after this model. So we are considering a significant conversion of resource to reserve during that period and factoring in that recovery to extend the mine life the way it should.
Jorge Beristain
Would there be any further upside there that you are aware of from tailings?
