company decisions, page-7

The issue I have with the Murchison is that it was obvious before start up that the PoG was on the way down. in April 13 the PoG took a big tumble and was confirmed in June 13. Murchison started up at the end of May 13 so it was not a matter of prediction it was blindingly obvious and as such in Sept 13 they announced that they were not proceeding with Causton's u/g. At that time they would have been aware of the Capex to make Murchison viable. What did they do:

- took on Luke Tonkin this increasing costs
- produced a AISC of $1432 for the month of Sept (see AGM presentation 15/11/13 slide 28). They never explained why this month was anomalous as their ASIC went back to the $2,000+ range thereafter.
- did not announce (until recently) that to make it viable they needed to open 4 u/g mines at a Capex of $80m over 3 years.
- fiddled around until Jan 14 producing 46mozs gold with around $600/oz loss.
- let the cost of Murchison blow out from $70m to $95m and then squeeze it back in negotiation to $91m.
- cannot then close mine until June 14 - producing further losses
- got into a mess with NAB over a loan which required repayment and caused the CR in Oct 13 (@ 85c)
- still didn't fully repay NAB loan and used surplus as Working Capital
- still left an uncertainty about a due payment of $15m to WA government for IGR transaction (still don't know if this has been paid)
At the AGM they were asked if Chris Banaksik role could describe his role in the Murchison decision) (he is responsible exploration and should have known that the u/g was required to make it viable). Paul Chapman would not let Chris speak and ducked the question by intervening saying it was a board decision (i.e it's an old boys club).
i contend that they knew most of the facts back in Feb - June 13 and:
1. Could have pulled the plug in Feb - June 13 prior to contracts becoming operational
2. Kept quiet (not allowed under continuous disclosure) about the $80m Capex.

All a very sad story and a multiple C*ck up with no one carrying the can.