Ann: Matilda-Wiluna Production Update, page-113

Hi (again)

Remember in the mining plan and forecast they seem to define 'high grade' ore body in the pit as a 1.6g/t, this is just their definition. It includes parts that are much higher as reported in the drilling results as well as any grades in between worth processing.

I think you are confusing drilling results with resource definition. For example ...
Extension of high grade oxide mineralisation north of M4 pit
9m @ 5.16g/t Au from 28m (MARC0170 M4 Lode)
2m @ 6.67g/t Au from 29m (MARC0171 M4 Lode)
That is what you are referring to in a drill result, but it is the headline figure, representing 11m total in the ore body. If you read to the end of the report you will see the detailed results with all the grades reported. They could define the ore body as that, for a tiny amount of oz at a high grade.

However to define reserves and resources they should also include any other grades that can be economically mined OVER THE LIFE OF THE MINE. This requires quite a lot of tweaking models and is the reason it takes so long for the reserves to be upgraded, and it only usually happens once a year while drilling results come all year round.

So high grade drill results do not necessarily mean the same high grade mining ore grades in the quarterly, it just means more oz as lower grades included on the way to getting high grades.

You did see net grades increase in Dec and in the last quarterly since the mining includes more 'high' grade and less low grade stockpiled. Remember the bulk of costs come from the mining, so you may as well keep the plant running on low grade stuff you had to remove anyhow, as long as you can get gold from it.

I really don't have time to go into it more or argue about it, sorry if it is not sufficient explanation to answer your question. If you or others do not agree or follow then it is up to each to walk away. If you are considering buying BLK then it is important to understand what grades they are talking about when they say 'high grade'. I do not think their open pit mine plan ever talks about much over 1.6g over life of mine.

This is just an answer to a specific question, I do not think their grades are high compared to other miners, and they have a lot of overburden and low grade ore to remove. This is not a fantastic mine, and has had more than its fair share of delays and problems, and we may be the last people to know what is happening. However, it can still be worth a buy if the price is right when or if it starts to make money, considering also the risk it goes into VA.