chrisI do not know how one can say that their all in costs were...

chris

I do not know how one can say that their all in costs were about double their cash costs given that most of their other expenditure would have related to the Co-O mine and they failed to increase their cash balance above what they had in the previous quarter, and their gold selling price was USD1299. That would imply that they spent around USD500/ounce on longer term development works and exploration, ie $7.9m during this quarter.

The positives I take away from this report are:

1. They are likely to improve the head grade - my lower guess estimate is to 5.5 grams per tonne;

2. The March quarter is when you get the worst weather conditions in that area and the "dry" season is the middle of the year - so they should have about 6 months of lower rainfall (it rains even in their dry season) when they can build up an ore stockpile that will hopefully carry them over humps during the next wet season. I do not know if they actually have plans for this sort of contingency - this is what did RED in at first early last year, before a self-inflicted waste dump wall failure finished them off.

3. Mill throughput should increase - lets say at a sustained level of perhaps 2200 tpday (last quarter it only averaged 1566 tpd so there is a lot of scope for improvement.

4. The gold recovery rate may improve.

I note that they have not provided us with an indication of what they expect to produce in the next quarter. This is worrying. I would hope they achieve at least 25,000 ounces in the June quarter.

My expected medium term annual rate of production is now only 120,000 ounces (down from 150k ounces), until they prove themselves.

MML will now lose a lot of investor support due to its continued failures. The analysts will again have a field day with their reviews on the operations. Expect a heap of shorting (probably has already started by the in-crowd).

loki