nice intercept, page-3

it is not a sale to the thai gov - but rather to thai nationals. i am hoping that it will result in a nice capital return to shareholders. having said that, the proposed expansion will have to be funded, so that is where the funds might have to go.

i have constantly stated that kcn were paying too much (by way of dilution for kcn shareholders) for andean - but of course, now that kcn is a substantial shareholder, then we all hope that andean deliver the goods. lucky, though at this stage, that kcn did not issue too many shares, to aquire a 22% stake

the present mining grade is 2.4 grams per tonne

due to hedges, the price received for last quarters production was about us$300 less than the current market price. lucky, though that there are only about 59000 oz of hedging remaining, and from my reading of the matter, it would seem that about 40% of the coming financial years production, will be required to satisfy the hedged position, and this seems to be evenly spread through the year. anyway, cash flow should jump considerably. it is simple maths - just multiply us$300 by 150,000 oz, and the EXTRA (or marginal) cash flow is us$45m per annum or about au$60m per annum (other factors of course come into account - eg the tax free holiday, becomes a partial tax free holiday). what happens when production doubles to 300,000 oz per annum, and total costs remain at about us$250 per oz. the margin is about us$400 per oz, or about us$120m, or about au$150m - for the project. ok, there are some unknowns, like the granting of the mining leases , the sell down - but the good news is , is that the reserves are in place. the recently announced high grade intercept, only adds to to the confidence of the project. within a few years, it is within the realms of possibility that the company could easily be paying 50c to 70c per share in dividends