The Sari Gunay epithermal gold deposit is located in northwestern Iran, southeast of Kordestan province and 60 Km northwest of the city of the Hamedan. Exploration activities have been focused on two hills called Sari Gunay and Agh Dagh that is one kilometer away from each other. The preliminary study in 1999 led to the detection of a hydrothermal alteration system covering an area of 16 square kilometers associated with gold, antimony and arsenic mineralization in Dacite, Andesite porphyry Oligo-Miocene and tuff units. At the outset the exploratory grid was focused on antimony–arsenic mine showing argillic, phyllic and intense local silica alterations. After a series of surveys, the region involving hydrothermal altered rocks and antimony–arsenic sulfide veins was identified as the favorable area for epithermal gold mineralization. Following completion of a sequence of exploratory phases the primary and most important steps towards any mining development required for any feasibility study are considered to include ore deposit modeling and simulation, geological and minable ore reserve estimation. Geostatistical simulation is considered as a powerful tool for quantifying the estimation uncertainties and associated risks emerged out of limited sample data enabling more accurate economical evaluation of inherited risks associated with deposit and further mine production and planning decisions. The main objective of this research is to build a 3D model consistent with the actual geology, reserve estimation, draw grade –tonnage curve and preliminary feasibility of Sari Gunay deposit. In this research, the possible presence of any spatial trend distributed among data was evaluated using scatter plot of grades along different spatial coordinates concluded with no meaningful spatial trends. A set of directional experimental variograms were computed to identify any gold mineralization anisotropy. Finally gold reserve estimation using ordinary and indicator kriging methods was carried out on a block model of 24*24*10m unit cell size which yielded a minimum estimation variance compared to other block dimensions. For reserve estimation of Sari Gunay deposit a 3D fractal simulation algorithm called SGFRACT was modified and employed. Grade tonnage curves for the above mentioned three methods were computed and compared. According to preliminary economic evaluations, a gold cut off grade value of 0.8 gr/tons was chosen for ore reserve estimation and economic assessments. The gold reserves using indicator kriging and fractal simulation methods were estimated as 288 and 200.8 tons respectively. A comparison of gold grade estimates throughout deposit spatial extent showed that fractal simulation results gives a better match with known tectonic and structural settings of the gold mineralization which is believed to be the main controlling factor of mineralization. Using a gold price of 1670 US$/Oz, the deposit was proved to be profitable with 922 M$ net cash flow and an IRR of 73 percent over 15 years mine life time. This profitable figure shows more than three times profit than the current interest rate on long time investments which is about 20%. To ensure the lowest confidence limit of profitability the pre-feasibility assessment was re-worked using the bottom price of 1000 US$/Oz. Again the computed NPV was positive and amounted to 61M$ with an IRR of 24% which was still well above current bank interest rate on long time investments. The same assessment using 1000$/oz for gold price and the annual interest rate of 15% yielded a positive NPV value of 179M$ which still attractive to investors. Finally based on the pre-feasibility study results given above, it is concluded that the profitability of Sari Gunay exploitation is highly justified.