Ann: Gascoyne Capitalises on Strong A$ Gold Price, page-11

Hi C

Hi Conrad, Spec has done a sterling job at answering your queries. I suspect that Day Traders took positions yesterday morning in hope that SP would strengthen following this announcement. They sold down in late trading. Todays SP movement will tell the story. As Spec says above the GCY story is a little lackluster compared to the meteoric movements of companies with "possible" Billion $ deposits of gold nuggets in the Pilbara. Of course GCY actually has proven resources whereas the most of the Pilbara focused companies have none. The only outstanding financial element of the Dalgaranga project is the debt drawdown facility eloquently outlined by Spec. Once this has been bedded down (end of November) it's full steam ahead to complete the plant and get it up and running. If GCY can then produce Gold at a rate of 120k OZ p/a and constrain costs (AISC) to a figure of around A$1k per/oz or less then this company is going to have a very very strong cash flow. Efficiently mining ore and processing same can be a problematic undertaking fraught with difficulties. in this regard the previous history of mining Dalgaranga ore mitigates a great deal of risk. Nonetheless, development proceeds with risk management at the forefront of mind, hence the significant cash balance retained. Further mitigating risk, GCY have put together a first class mine development and mine management team, engaged experienced successful contractors and continue to closely manage the all elements of the project. Our MD Mike Dunbar is onsite this week. The company was able to raise $50M largely from Australian and O/S institutions. There are also High Net Worth individuals supporting GCY, many of whom do so because the B&M delivered them excellent returns in the past (research delisted ASX stock - Giralia Resources). Conrad, Gold is rare but patience is rarer!