Ann: Quarterly activities report , page-14

stlamc

Good post, and I agree with most of it.

However, I think production will be substantially less than 12k ounces in the March quarter.

My assumptions are that the plant will operate 10 days in January, 22 days in February and 24 days in March - a total of 56 days.

Average daily throughput of 2,500 tonnes.

Average grade of 2.1 grams per tonne (2.0 gms last quarter).

Gold recovery rate of 73% (69% last quarter and 72% previously, but they are trying to get it higher)

(2,500 x 56 x 2.1 x 0.73)/31.1035 = 6,900 ounces (at AUD POG $1600, revenue of $11.04m).

If I am right then they would be covering ongoing outlays, except for most of the the waste striping which is being funded out of the loan funds.

There is the potential for production to be higher, but given what has happened I would not count on it. Better to set a low estimate than a higher one with this one.

It looks like the contractor just would not learn and will finally be replaced in March. I also wish it had happened months ago.

The goldies were given a hiding today, and it is possible there is more pain to follow even though the POG is OK in my view.

loki