just pondering if, page-5

ken,

The depth of 1000m or so brings a number of issues, none of which are insurmountable. However the size, grade and continuity of the orebody is much more critical than if it was closer to the surface.

Some points:

1. If the general depth of the deposit is 1000m down then a main shaft and ventilation/secondary access shafts must be sunk, all as upfront costs before mining starts. A shaft might cost $30k per vertical metre (or more) so a single shaft might cost $30 million. So there are 'above norm' capital costs associated with the depth. This is not a problem if the deposit is large enough and high grade to support this cost.

2. Underground mining costs are not too badly affected, with some caveats. Haulage costs will be higher than for a shallower u/g mine, but not excessively so.

Ground pressures increase as depth increases so the rock conditions will be important to mining costs. However there are many mines around the world working at depths much greater than 1000m, so it is way too early right now to be considering this.

The upshot is that as long as the deposit is large and high grade, the increased capital and operating costs will not be a problem.

To put this in context Mt Isa, Cobar, Kalgoorle, etc etc are all below 2,000 to 3,000m. So there is nothing out of the normal about Teena.

IMO we need to see continuing high zinc grades >10% and good drill intercepts > 20m to keep the market excited. The style of mineralisation at Teena is very important as Sedex deposits are of sedimentary origin, which is very promising as they typically can be large, which is what we also want.

cheers
gosouth