Way Oversold!, page-41

No big fight with you Groundswell, ...but all companies have their issues -just that ours has been a lack of gold / income (no biggie).

I'm committed to OGX and I intend to everything in my power to help fix what has been broken.

In any business there are two competing forces ...income and expenditure. OGX was set up for a massive infrastructure and operating overheads to support the operation of a mine that has clearly turned out to me smaller than expected with many more barriers and breakdowns to achieve a reasonable steady-state production. The evidence for this is in the results of the last quarterly.

So what can we do?

We can continue to reduce our costs urgently, while at the same time mining our core asset which is the intermediate zone along with the rich areas of Mestre and Cascavel central.

Income

• I think the intermediate zone will be the lifeline for the company to get in cash quickly, pay Cartesian (this payment is already covered I've heard) and become cash-flow positive.
• In the medium term, income may be available from some of the Antenna-Xupe deposit depending on drill results, and it is 5-6 k over the hill.
• In the longer term, there is Santa Rita (remember the cows?) looking good and even Eliseo as possible feed.
• This is all contingent on getting set up for cyanide treatment of some sort -so I'm sure it's a high priority.

Expenditure

• I've heard that the entire operation in Brazil costs less than $150,000 per month to run including all wages, and this may be trimmed as we continue to focus on productivity. What would this figure be in Australia -multiples larger?
• Often, companies set up with hire equipment and vehicles to get mobile in the short term, without looking at the long term total costs. Perhaps there is continuing scope there to save long term costs.
• There is maybe a good opportunity to consolidate offices too.
• Sometimes companies are left with a raft of fees for ongoing services that can be cut or at least trimmed.
• So we are left with the Cartesian Royalty payment ...what can we do? Just pay it that's all -no point whinging about it.

We need some income to save some expenditure and start getting ourselves on a self sufficient level heading. We have been beset with breakdowns and maybe part of that is staff training and also very importantly implementing strategies to build a workplace community culture and get staff participating with a positive outlook. Let's not underestimate the staff disenchantment created by the past company turmoil. Let's not turn this into a running complaint about past management either ...won't help and is backwards looking -we want to be forwards looking.

I have deliberately left until last some comment about the other prospects. They are long term but many with fantastic potential. As we know Sertao is being drilled and has an existing resource and there has been great speculation for both above ground extension and underground development for years. Others can fill in any details here.

I've also heard that exploration is considering taking an exciting turn that may have positive implications for our entire Greenstone belt.

Possible gold theft can be ironed out and I have no doubt we are on the job there.

If we can get our income up (mining), our expenditure down and keep proving these potential monsters we have got ...we will be on a winner big time!

Yes, I know we want to see gold -so perhaps revisit my words in the next six weeks and judge then.

Cheers,

SJB