update needed, page-4

Hello Flyboy, I promptly emailed you the spreadsheet to the address you gave me and it came back saturday undelivered.

So a summary of the results for Bundara are given below. There are some very important assumptions and I ask you, and anyone else who reads this post, to read these carefully. I have not been to site and I have no first hand knowledge of the project. The figures have been adapted from a study done by me on another gold depsoit in another country.

(1) I do not know the ratio of oxide to sulfide ore. In my example I have assumed three years mining oxide ore and 7 years mining sulfide ore;

(2) I do not know whether the sulfide is refrectory with the gold contained in arsenopyrite (like nearby Harbour lights), or whether it is as free gold in quartz. I have assumed somewhere in between;

(3) I have assumed all the mining work will be put out for contract and that the ore will be treated on a simple processing plant obtained second hand for a capital cost not exceeding A$12 million. Total capex allowed for is A$15 million including accomodation and pre strip.

(4) I have assumed a 10 year mine life and the published grades of 2 g/t and 4.96 M.

(5) I have assumed constant A$

(6) I have used gold recoveries of 92% for oxide ore and 85% for sulfide ore

(7) Gold price used is A$1,400 per troy ounce

(8) I have assumed ining costs of ore and waste are $4 per tonne each.

(9) I have assumed the average strip ratio for oxide ore is 3 to 1 and for the sulfide ore is 5 to 1. I have done no open pit modelling and these figures lttle more than a guess

(10) I hav assumed all up processing costs are A$25 a tonne of ore (excluding depreciation)

(11) I have taken admninstration and Mine Closure costs as A$1 per tonne of ore

(12) a royalty of 3% of gross sales and a corporate tax rate of 30% has been assumed

(13) I have used a discount rate of 10% to calculate the IRR

(14) I have made no allowance for interest on capital or for head office costs.

Based on the above, a summary of the totals (in A$ millions unless otherwie specified) is given below:

Revenue 354
Operating Costs (inc depreciation) 241
Royaties and taxes 46
Total after tax profit 78
IRR 76%
NPV 42.66

I must stress that these figures are based on a number of assumptions which may be invalid or wrong and thus the actual figures may vary very considerably from those given above. This is not investment advice and the writer assumes no responsiblity for any actions taken by an investor using the above data.